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hi, i'm buck, your personal tour guide tothe federal reserve. i'm here to introduce you to one of the most complex but effectiveinstitutions in the united states. but don't worry, i'll explain it all in plain english.just beside me is a roadmap of where we're going. together we'll walk through the federalreserve system. literally. and along the way i'll show you just what goes on around hereand why it's important. by the end of this tour, you, too will be able to explain thefederal reserve in plain english. all our lives we've been told that economicsis boring. it's dull. it's not worth the time it takes to understand it. and all our lives,we've been lied to. war. poverty. revolution. they all hinge oneconomics. and economics all rests on one
key concept: money. money. it is the economic water in which welive our lives. we even call it 'currency'; it flows around us, carries us in its wake.drowns those who are not careful. we use it every day in nearly every transactionwe conduct. we spend our lives working for it, worrying about it, saving it, spendingit, pinching it. it defines our social status. it compromises our morals. people are willingto fight, die and kill for it. but what is it? where does it come from? howis it created? who controls it? it is a remarkable fact that, given its central importance inour lives, not one person in a hundred could answer such basic questions about money asthese.
so if you were planning a family, you'd wantto know where babies come from. and this is a lot about banking. so let me ask you: wheredoes money come from? where does the money come from? the governmentprints it. it's printed off. how is new money created? by labor. people work and produce wealth,and the money is supposed to match that wealth. where does money come from? well i have a pretty different outlook onmoney. it actually comes from, like, trees, right? but why is this? how could we be so ignorantabout a topic of such importance? "where does
money come from?" is a basic, childlike question.so why is our only response the childlike answer, meant as a joke: "it grows on trees"? such a profound state of ignorance could notcome about naturally. from the time we are children, we are curious about the world andeager to learn about the way it works. and what could lead to a better understandingof the way the world works than a knowledge of money, its creation and destruction? yetdiscussion of this topic is fastidiously avoided in our school years and ignored in our dailylife. our monetary ignorance is artificial, a smokescreen that has been erected on purposeand perpetrated with the help of complicated systems and insufferable economic jargon.
but it doesn't take an economist to understandthe importance of money. deep down we all know that the wars, the poverty, the violencewe see around us hinges on this question of money. it seems like a thousand piece jigsawpuzzle just waiting to be solved. and it is. the puzzle pieces, taken together, createan image of the federal reserve, america's central bank and the heart of the country'sbanking system. despite its central importance to the economy, relatively few have heardof it, and fewer still know what it is, despite the bank's attempts at self-description: our economy runs on a complex system of exchangeof goods and services in which money plays a key part. coin, currency, savings, and checkingaccounts; the overall supply of money is managed
by the federal reserve. money is the mediumthrough which economic exchanges take place, and money as a standard of value helps usto set prices for goods and services. the job of managing money--monetary policy--isto preserve the purchasing power of the dollar while ensuring that a sufficient amount ofmoney is available to promote economic growth. the federal reserve also promotes the safetyand soundness of the institutions where we do our banking. it ensures that the mechanismsby which we make payments, whether by cash, cheque, or electronic means, operates smoothlyand efficiently. and in its fiscal role acts as the bankerfor the united states government. now these duties comprise the major responsibilitiesof our central bank.
but in order to understand the federal reserve,we must first understand its origins and context. we must deconstruct the puzzle. the first piece of that puzzle lies here,in the white house. this is where the federal reserve act, then known as the currency bill,was signed into law after passing the house and senate in late december, 1913. the new york times of christmas eve, 1913,described the festive scene: "the christmas spirit pervaded the gathering.while the ceremony was a little less impressive than that of the signing of the tarriff acton oct. 3 last in the same room, the spectators were much more enthusiastic and seized everyoccasion to applaud."
there in the white house that fateful decemberevening, president wilson signed away the last veneer of control over the american moneysupply to a cartel; a well-organized gang of crooks so successful, so cunning, so well-hiddenthat even now, a century later, few know of its existence, let alone the details of itsoperations. but those details have been openly admitted for decades. of course, just as we have been taught tofind economics boring, we have been taught that this story is boring. this is the waythe federal reserve itself tells it: the united states was facing severe financialproblems. at the turn of the century, most banks were issuing their own currency called"bank notes." the trouble was, currency that
was good in one state was sometimes worthlessin another. people began to lose confidence in their money, since it was only as soundas the bank that issued it. fearful that their bank might go out of business, they rushedto exchange their bank notes for gold or silver. by attempting to do so, they created the panicof 1907. during the panic, people streamed to the banksand demanded their deposits. the banks could not meet the demand; they simply did not haveenough gold and silver coin available. many banks went under. people lost millions ofdollars, businesses suffered, unemployment rose, and the stability of our economic systemwas again threatened. well, this couldn't go on. if the countrywas going to grow and prosper, some means
would have to be found to achieve financialand economic stability. to prevent financial panics like the one in1907, president woodrow wilson signed the federal reserve act into law in 1913. but this is history as told by the victors:a revisionist vision in which the creation of a central bank to control the nation'smoney supply is merely a boring historical footnote, about as important as the inventionof the zipper or an early 20th century hoola-hoop craze. the truth is that the story of thesecret banking conclave that gave birth to that federal reserve act is as exciting anddramatic as any hollywood screenplay or detective novel yarn, and all the more remarkable forthe fact that it is all true.
we pick up the story, appropriately enough,under cover of darkness. it was the night of november 22, 1910, and a group of the richestand most powerful men in america were boarding a private rail car at an unassuming railroadstation in hoboken, new jersey. the car, waiting with shades drawn to keep onlookers from seeinginside, belonged to senator nelson aldrich, the father-in-law of billionaire heir to therockefeller dynasty, john d. rockefeller, jr. a central figure on the influential senatefinance committee where he oversaw the nation's monetary policy, aldrich was referred to inthe press as the "general manager of the nation." joining him that evening was his private secretary,shelton, and a who's who of the nation's banking and financial elite: a. piatt andrew, theassistant treasury secretary; frank vanderlip,
president of the national city bank of newyork; henry p. davison, a senior partner of j.p. morgan company; benjamin strong, jr.,an associate of j.p. morgan and president of bankers trust co., and paul warburg, heirof the warburg banking family and son-in-law of solomon loeb of the famed new york investmentfirm, kuhn, loeb & company. the men had been told to arrive one by oneafter sunset to attract as little attention as possible. indeed, secrecy was so importantto their mission that the group did not use anything but their first names throughoutthe journey so as to keep their true identities secret even from their own servants and waitstaff. the movements of any one of them would have been reason enough to attract the attentionof new york's voracious press, especially
in an era where banking and monetary reformwas seen as a key issue for the future of the nation; a meeting of all of them, nowthat would surely have been the story of the century. and it was. their destination? the secluded jekyll islandoff the coast of georgia, home to the prestigious jekyll island club whose members includedthe morgans, rockefellers, warburgs and rothschilds. their purpose? davison told intrepid localnewspaper reporters who had caught wind of the meeting that they were going duck hunting.but in reality, they were going to draft a reform of the nation's banking industry incomplete secrecy. g. edward griffin, the author of the bestsellingthe creature from jekyll island and a long-time
federal reserve researcher, explains: what happened is the banks decided that sincethere was going to be legislation anyway to control their industry, that they wouldn'tjust sit back and wait and see what happened and cross their fingers that it would be ok.they decided to do what so many cartels do today: they decided to take the lead. andthey would be the ones calling for regulations and reform. they like the word "reform." the americanpeople are suckers for the word "reform." you just put that into any corrupt piece oflegislation, call it "reform" and people say "oh, i'm all for 'reform'," and so they votefor it or accept it.
so that's what they were doing. they decided,"we will 'reform' our own industry." in other words, "we will create a cartel and we willgive the cartel the power of government. we'll take our cartel agreement so we can self-regulateto our advantage and we'll call it 'the federal reserve act.' and then we'll take this cartelagreement to washington and convince those idiots there to pass it into law." and that basically was the strategy. it wasa brilliant strategy. of course we see it happening all the time, certainly in our ownday today we see the same thing happened in other cartelized industries. right now we'rewatching it unfold in the field of healthcare, but at that time it was banking, alright?
and so the banking cartel wrote their ownrules and regulations, called it "the federal reserve act," got it passed into law, andit was very much to their liking because they wrote it. and in essence what they had createdwas a set of rules that made it possible for themselves to regulate their industry, butthey went even beyond that. in fact, it's clear to me when i was reading their lettersand their conversation at the time, and the debates, that they never dreamed that congresswould go along and also give them the right to issue the nation's money supply. not onlywere they now going to regulate their own industry, which is what they started out aswanting to do, but they got this incredible gift that they didn't dream would be givento them (although they were negotiating for
it), and that was that congress gave themthe authority to issue the nation's money. congress gave away the sovereign right toissue the nation's money to the private banks. and so all of this was in the federal reserveact, and the american people were joyous because they were told, and they were convinced, thatthis was finally a means of controlling this big creature from jekyll island. amazingly enough, they were successful, notjust in conspiring to write the legislation that would eventually become the federal reserveact, but in keeping that conspiracy a secret from the public for decades. it was firstreported on in 1916 by bertie charles forbes, the financial writer who would later go onto found forbes magazine, but it was never
fully admitted until a full quarter centurylater when frank vanderlip wrote a casual admission of the meeting in the february 9,1935 edition of the saturday evening post: "i was as secretive—indeed, as furtive—asany conspirator.[...]i do not feel it is any exaggeration to speak of our secret expeditionto jekyll island as the occasion of the actual conception of what eventually became the federalreserve system." over the course of their nine days of deliberationat the jekyll island club, they devised a plan so overarching, so ambitious, that eventhey could scarcely imagine that it would ever be passed by congress. as vanderlip putit, "discovery [of our plan], we knew, simplymust not happen, or else all our time and
effort would be wasted. if it were to be exposedpublicly that our particular group had got together and written a banking bill, thatbill would have no chance whatever of passage by congress." so what, precisely, did this conclave of conspiratorsdevise at their jekyll island meeting? a plan for a central banking system to be owned bythe banks themselves, a system which would organize the nation's banks into a privatecartel that would have sole control over the money supply itself. at the end of their nineday meeting, the bankers and financiers went back to their respective offices content inwhat they had accomplished. the details of the plan changed between its 1910 draftingand the eventual passage of the federal reserve
act, but the essential ideas were there. but ultimately, this scene on jekyll island,too, is just one piece of a larger puzzle. and like any other puzzle piece, it has tobe seen in its wider context for the bigger picture to become visible. to understand theother pieces of the puzzle and their importance in the creation of the federal reserve, wehave to travel backward in time. the story begins in late 17th century europe.the nine years' war is raging across the continent as louis xiv of france finds himself pittedagainst much of the rest of the continent over his territorial and dynastic claims.king william iii of england, devastated by a stunning naval defeat, commits his courtto rebuilding the english navy. there's only
one problem: money. the government's coffershave been exhausted by the waging of the war and william's credit is drying up. a scottish banker, william paterson, has abanker's solution: a proposal "to form a company to lend a million pounds to the governmentat six percent (plus 5,000 "management fee") with the right of note issue." by 1694 theidea has been slightly revised (a 1.2 million pound loan at 8 percent plus 4000 for managementexpenses), but it goes ahead: the magnanimously titled bank of england is created. the name is a carefully constructed lie, designedto make the bank appear to be a government entity. but it is not. it is a private bankowned by private shareholders for their private
profit with a charter from the king that allowsthem to print the public's money out of thin air and lend it to the crown. what happenshere at the birth of the bank of england in 1694 is the creation of a template that willbe repeated in country after country around the world: a privately controlled centralbank lending money to the government at interest, money that it prints out of nothing. and thejewel in the crown for the international bankers that creates this system is the future economicpowerhouse of the world, the united states. in many important respects, the history ofthe united states is the history of the struggle of the american people against the bankersthat wish to control their money. by the 1780s, with colonies still fighting for independencefrom the crown, the bankers will get their
wish. in 1781 the united states is in financialturmoil. the continental, the paper currency issued by the continental congress to payfor the war, has collapsed from overissue and british counterfeiting. desperate to finda way to finance the end stages of the war, congress turns to robert morris, a wealthyshipping merchant who was investigated for war profiteering just two years earlier. nowas "superintendent of finance" of the united states from 1781 to 1784 he is regarded asthe most powerful man in america next to general washington. in his capacity as superintendent of finance,morris argues for the creation of a privately-owned
central bank deliberately modeled on the bankof england that the colonies were supposedly fighting against. congress, backed into acorner by war obligations and forced to do business with the bankers just like king williamin the 1690s, acquiesces and charters the bank of north america as the nation's firstcentral bank. and exactly as the bank of england came into existence loaning the british crown1.2 million pounds, the b.n.a. started business by loaning $1.2 million to congress. by the end of the war, morris has fallen outof political favor and the bank of north america's currency has failed to win over a skepticalpublic. the b.n.a. is downgraded from a national central bank to a private commercial bankchartered by the state of pennsylvania.
but the bankers have not given up yet. beforethe ink is even dry on the constitution, a group led by alexander hamilton is alreadyworking on the next privately-owned central bank for the newly formed united states ofamerica. so brazen is hamilton in the forwarding ofthis agenda that he makes no attempt to hide his aims or those of the banking interestshe serves: "a national debt, if it is not excessive,will be to us a national blessing," he wrote in a letter to james duane in 1781. "it willbe a powerful cement of our union. it will also create a necessity for keeping up taxationto a degree which, without being oppressive, will be a spur to industry."
opposition to hamilton and his debt-basedsystem for establishing the finances of the us is fierce. led by jefferson and madison,the bankers and their system of debt-enslavement is called out for the force of destructionthat it is. as thomas jefferson wrote: "[t]he spirit of war and indictment, [...] sincethe modern theory of the perpetuation of debt, has drenched the earth with blood, and crushedits inhabitants under burdens ever accumulating." still, hamilton proves victorious. the firstbank of the united states is chartered in 1791 and follows the pattern of the bank ofengland and the bank of north america almost exactly; a privately-owned central bank withthe authority to loan money that it creates out of nothing to the government. in fact,it is the very same people behind the new
bank as were behind the old bank of northamerica. it was alexander hamilton, robert morris' former aide, who first proposed morrisfor the position of financial superintendent, and the director of the old bank of northamerica, thomas willing, is brought in to serve as the first director of the first bankof the united states. meet the new banking bosses, same as the old banking bosses. in the first five years of the banks' existence,the us government borrows 8.2 million dollars from the bank and prices rise 72%. by 1795,when hamilton leaves office, the incoming treasury secretary announces that the governmentneeds even more money and sells off the government's meager 20% share in the bank, making it afully private corporation. once again, the
us economy is plundered while the privatebanking cartel laughs all the way to the bank that they created. by the time the bank's charter comes due forrenewal in 1811, the tide has changed for the money interests behind the bank. hamiltonis dead, shot to death in a duel with aaron burr. the bank-supporting federalist partyis out of power. the public are wary of foreign ownership of the central bank, and what'smore don't see the point of a central bank in time of peace. accordingly, the charterrenewal is voted down in the senate and the bank is closed in 1811. less than a year later, the us is once againat war with england. after 2 years of bitter
struggle the public debt of the us has nearlytripled from $45.2 million to $119.2 million. with trade at a standstill, prices soaring,inflation rising and debt mounting, president madison signs the charter for the creationof another central bank, the second bank of the united states, in 1816. just like thetwo central banks before it, it is majority privately-owned and is granted the power toloan money that it creates out of thin air to the government. the 20 year bank charter is due to expirein 1836, but president jackson has already vowed to let it die prior to renewal. believingthat jackson won't risk his chance for reelection in 1832 on the issue, the bankers forwarda bill to renew the bank's charter in july
of that year, 4 years ahead of schedule. remarkably,jackson vetoes the renewal charter and stakes his reelection on the people's support ofhis move. in his veto message, jackson writes in no uncertain terms about his oppositionto the bank: "whatever interest or influence, whether publicor private, has given birth to this act, it can not be found either in the wishes or necessitiesof the executive department, by which present action is deemed premature, and the powersconferred upon its agent not only unnecessary, but dangerous to the government and country.it is to be regretted that the rich and powerful too often bend the acts of government to theirselfish purposes.[...]if we can not at once, in justice to interests vested under improvidentlegislation, make our government what it ought
to be, we can at least take a stand againstall new grants of monopolies and exclusive privileges, against any prostitution of ourgovernment to the advancement of the few at the expense of the many, and in favor of compromiseand gradual reform in our code of laws and system of political economy." the people side with jackson and he's reelectedon the back of his slogan, "jackson and no bank!" the president makes good on his pledge.in 1833 he announces that the government will stop using the bank and will pay off its debt.the bankers retaliate in 1834 by staging a financial crisis and attempting to pin theblame on jackson, but it's no use. on january 8, 1835, president jackson succeeds in payingoff the debt, and for the first and only time
in its history the united states is free fromthe debt chain of the bankers. in 1836 the second bank of the united states' charterexpires and the bank loses its status as america's central bank. it is 77 years before the bankers can regainthe jewel in their crown. but it is not for lack of trying. immediately upon the deathof the bank, the banking oligarchs in england react by contracting trade, removing capitalfrom the u.s., demanding payment in hard currency for all exports, and tightening credit. thisresults in a financial crisis known as the panic of 1837, and once again jackson's campaignto kill the bank is blamed for the crisis. throughout the late 19th century the unitedstates is rocked by banking panics brought
about by wild banking speculation and sharpcontractions in credit. by the dawn of the 20th century, the bulk of the money in theamerican economy has been centralized in the hands of a small clique of industrial magnates,each with a near monopoly on a sector of the economy. there are the astors in real estate,the carnegies and the schwabs in steel, the harrimans, stanfords and vanderbilts in railroads,the mellons and the rockefellers in oil. as all of these families start to consolidatetheir fortunes, they gravitate naturally to the banking sector. and in this capacity,they form a network of financial interests and institutions that centered largely aroundone man, banking scion and increasingly america's informal central banker in the absence ofa central bank, john pierpont morgan.
john pierpont morgan, or "pierpont" as heprefers to be called, is born in hartford, connecticut in 1837 to junius spencer morgan,a successful banker and financier. morgan rides his father's coattails into the bankingbusiness and by 1871 is partnered in his own firm, the firm that was eventually to becomej.p. morgan and company. it is morgan who finances cornelius vanderbilt'snew york central railroad. it is morgan that finances the launch of nearly every majorcorporation of the period, from at&t to general electric to general motors to dupont. it ismorgan who buys out carnegie and creates the united states steel corporation, america'sfirst billion dollar company. it is morgan who brokers a deal with president grover clevelandto "save" the nation's gold reserves by selling
62 million dollars worth of gold to the treasuryin return for government bonds. and it is morgan, who, in 1907, sets in motion the crisisthat leads to the creation of the federal reserve. that year, morgan begins spreading rumorsabout the precarious finances of the knickerbocker trust company, a morgan competitor and oneof the largest financial institutions in the united states at the time. the resulting crisis,dubbed the panic of 1907, shakes the u.s. financial system to its core. morgan putshimself forward as a hero, boldly offering to help underwrite some of the faltering banksand brokerage houses to keep them from going under. after a bout of hand-wringing overthe nation's finances, a congressional committee
is assembled to investigate the "money trust,"the bankers and financiers who brought the nation so close to financial ruin and thatwield such power over the nation's finances. the public follows the issue closely, andin the end a handful of bankers are identified as key players in the money trust's operations,including paul warburg, benjamin strong, jr., and j.p. morgan. andrew gavin marshall, editor of the people'sbook project, explains: at the beginning of the 20th century therewas an investigation following the greatest of these financial panics, which was in 1907,and this investigation was on "the money trust." it found that three banking interests--j.p.morgan, national city bank, and the city bank
of new york--basically controlled the entirefinancial system. three banks. the public hatred toward these institutions was unprecedented.there was an overwhelming consensus in the country for establishing a central bank, butthere were many different interests in pushing this and everyone had their own purpose behindadvocating for a central bank. so to represent most people, you had farmerinterests, populists, progressives, who were advocating a central bank because they couldn'ttake the recurring panics, but they wanted government control of the central bank. theywanted it to be exclusively under the public control because they despised and feared thenew york banks as wielding too much influence, so for them a central bank would be a wayto curb the power of these private financial
interests. on the other hand, those same financial interestswere advocating for a central bank to serve as a source of stability for their controlof the system, and also to act as a lender of last resort to them so they would neverhave to face collapse. but also, in order to exert more control through a central bank,the private new york banking community wanted a central bank under the exclusive controlof them. there's a shocker. so you had all these various interests whichconverged. of course, the most influential happened to be the new york financial houseswhich were more aligned with the european financial houses than they were with any otherelement in american society. the main individual
behind the founding of the federal reservewas paul warburg, who was a partner with kuhn, loeb and company, a european banking house.his brothers were prominent bankers in germany at that time, and he had of course close connectionswith every major financial and industrial firm in the united states and most of thoseexisting in europe. and he was discussing all of these ideas with his fellow compatriotsin advocating for a central bank. in 1910, warburg got the support of a senator namednelson aldrich, whose family later married into the rockefeller family (again, i'm surejust a coincidence). aldrich invited warburg and a number of other bankers to a private,secret meeting on jekyll island just off the coast of georgia where they met in 1910 todiscuss the construction of a central bank
in the united states, but one which wouldof course be owned by and serve the interests of the private bank. aldrich then presentedthis in 1911 as the "aldrich plan" in the u.s. congress, but it was actually voted out. the public, suspicious of senator aldrich'sbanking connections, ultimately reject the jekyll island cabal's "aldrich plan." thecabal does not give up, however. they simply revise and rename their plan, giving it anew public face, that of representative carter glass and senator robert owen. in the end, the money trust that was behindthe panic of 1907 uses the public's own outrage against them to complete their consolidationof control over the banking system. the newly-retitled
federal reserve act is signed into law ondecember 23, 1913 and the fed begins operations the next year. so how does the federal reserve system work?what does it do? who owns and controls it? these are the basic questions that would getto the heart of the fundamental question: 'what is money?' and that is why the answerto these questions have been shrouded in impenetrable economic jargon. even the federal reserve's own educationalpropaganda, which has an unusual tendency toward cutesy animation and talking down toits audience, has a difficult time summarizing the fed's mission and responsibilities. accordingto the fed:
to achieve [its] goals, the fed, then andnow, combines centralized national authority through the board of governors with a healthydose of regional independence through the reserve banks. a third entity, the federalopen market committee, brings together the first two in setting the nation's monetarypolicy. precisely what imaginary gaggle of schoolchildrenis this economic gibberish aimed at? the simple truth, hidden behind the sleightof hand of economic jargon and magisterial titles, is that a banking cartel has monopolizedthe most important item in our entire economy: money itself. we are taught to think of money as the piecesof paper printed in government printing presses
or coins minted by government mints. whilethis is partially true, in this day and age the actual notes and coins circulating inthe economy represent only a tiny fraction of the money in existence. over 90% of themoney supply is in fact created by private banks as loans that are payable back to thebanks at interest. although this simple fact is obscured by thewizards of wall street and gods of money who want to make the money creation process intosome special art of alchemy carefully overseen by the government, the truth is not hiddenfrom the public. in december 1977, the federal reserve bankof new york published another of its dumbed-down cartoon-ridden information pamphlets for thegeneral public attempting to explain the functions
of the federal reserve system. there in blackand white they carefully explain the money creation process: "commercial banks create checkbook money wheneverthey grant a loan, simply by adding new deposit dollars to accounts on their books in exchangefor a borrower's iou.[...]banks create money by 'monetizing' the private debts of businessesand individuals. that is, they create amounts of money against the value of those ious." there it is, in plain english: the vast majorityof money in the economy, the "checkbook" money in our accounts at the bank and that we usein our electronic transfers and digital payments, is created not by a government printing press,but by the bank itself. it is created out
of thin air as debt, owed back to the bankthat created it at interest. this means that bank loans are not money taken from otherbank depositors, but new money simply conjured into existence and placed into your account.and the bank is able to create much more money than it has cash to back up those deposits. the fed claims to be the entity overseeingand backing up the banking industry. it was established, according to its own propaganda,to stabilize the system and prevent bank runs like the panic of 1907 from happening again: throughout much of the 1800s, almost any organizationthat wanted could print its own money. as a result, many states, banks, and even onenew york druggist, did just that. in fact
at one time there were over 30,000 differentvarieties of currency in circulation. imagine the confusion. not only were there multitudes of currencies,some were redeemable in gold and silver, others were backed by bonds issued by regional governments.it was not unusual for people to lose faith both in the value of their currency and inthe entire financial system. with many people trying to withdraw their deposits at once,sometimes the banks didn't have enough money on hand to pay their depositors. then whenthe funds ran out the banks suspended payment temporarily and some even closed. people losttheir entire savings. sometimes regional economies suffered.
obviously something had to be done. and in1913, something was. in that year, president woodrow wilson signed into effect the federalreserve act. this act created the federal reserve system to provide a safer and morestable monetary and banking system. if that was indeed its aim, it signally failedto do so in running up one of the greatest bubbles in american history to that pointin the 1920s, just a decade after its creation. the popping of that bubble, of course, leaddirectly into the great depression and one of the greatest periods of mass poverty inamerican history. economists have long argued that the fed itself was the cause of the depressionby its complete mismanagement of the money supply. as former federal reserve chairmanben bernanke admitted in a speech commemorating
fed critic milton friedman's 90th birthday:"regarding the great depression. you're right, we did it. we're very sorry. but thanks toyou, we won't do it again." "price stability" is another cited tenet ofthe federal reserve's mandate. but here, too, the fed has completely failed to live up toits own standards: aside from the banking system, the federalreserve has another responsibility that's probably even more important. it's in chargeof something called "monetary policy." basically, it means trying to keep prices stable to avoidinflation. say you buy a cd today for $14. but what if next year the price of the cdjumped to $20 or $50, not because of a change in supply or demand, but because all priceswere going up. that's inflation.
there are a lot of different causes of inflation,but one of the most important is too much money. the fed can adjust the money supplyby injecting money into the system electronically, or by withdrawing money from the economy. think of it: the federal reserve has the abilityto create money, or make it disappear. what's most important is what happens as a result.any time the supply of money is altered, the effects are felt throughout the economy. the fed's methods have changed over time totake advantage of the latest computers and electronics, but its mission remains the same:to aim for stable prices, full employment and a growing economy.
100 years ago, in 1913, the fed was created,and we've marked it with a vertical line there. consumer prices now are about 30 times higherthan they were when the fed was created in 1913. paper money, too, is the responsibility ofthe federal reserve. hence the dollars in circulation are not treasury notes, not billsof credit, but federal reserve notes, debt-based notes backed up ultimately by the government'sown promise to pay, its "sovereign bonds" secured by the taxpayers themselves. at onetime, the federal reserve banks were legally required to keep large stockpiles of goldin reserve to back up these notes, but that requirement was abandoned and today the notesare backed up mostly by government securities.
the fed no longer keeps any actual gold onits books, but gold "certificates" issued by the treasury and valued not at the spotprice of $1300 per troy ounce, but an arbitrarily fixed "statutory price" of $42 2/9 per ounce. but i do have one question: during the crisisor at any time that you're aware of, has the federal reserve or the treasury participatedin any gold swap arrangements? the federal reserve does not own any goldat all. we have not owned gold since 1934 so we have not engaged in any gold swaps. but it appears on your balance sheet thatyou hold gold. what appears on our balance sheet is goldcertificates. when we turned in...before 1934,
we did...the federal reserve did own gold.we turned that over by law to the treasury and received in return for that gold certificates. if the treasury entered into...because underthe exchange stabilization fund i would assume they probably have the legal authority todo it...they wouldn't be able to do it then because you have the securities for essentiallyall the gold? no, we have no interest in the gold that isowned by the treasury. we have simply an accounting document that is called "gold certificates"that represents the value at a statutory rate that we gave to the treasury in 1934. and still measured at $42 an ounce which makesno sense whatsoever.
clearly, there is a discrepancy between whatwe are led to believe is motivating the fed and what it actually does. to understand whatthe fed is actually intended to do, it's first important to understand that the federal reserveis not a bank, per se, but a system. this system codifies, institutionalizes, overseesand undergirds a form of banking called fractional reserve banking, in which banks are allowedto lend out more money than they actually have in their vaults. the process of decay and corruption startswith something called "fractional reserve banking." that's the technical name for it.and what that really means is that as the banking institution developed over severalcenturies, starting of course in europe, it
developed a practice of legalizing a certaindishonest accounting procedure. in other words, in the very, very beginning(if you want to go all the way back), people would bring their gold or silver to the banksfor safe keeping. and they said, "give us a paper receipt, we don't want to guard oursilver and our gold because people could come in in the middle of the night and they couldkill us or threaten us and they'll get our gold and silver so we can 't really guardit so we'll take it to the bank and have them guard it and we just want a paper receipt.and we'll take our receipt back and get our gold anytime we want." so in the beginningmoney was receipt money. then, instead of changing or exchanging the gold coins, theycould exchange the receipts, and people would
accept the receipts just as well as the gold,knowing that they could get gold. and so these paper receipts being circulated were in essencethe very first examples of paper money. well the banks learned early on in that gamethat here they were sitting on this pile of gold and all these paper receipts out there.people weren't bringing in the receipts anymore, very few of them, maybe five percent maybeseven percent of the people would bring in their paper receipts and ask for the gold.so they said, "ah ha! why don't we just sort of give more receipts out then we have gold?they'll never know because they only ask for, at the best, seven percent of it. so we cancreate more receipts for gold then we have. and we can collect interest on that becausewe'll loan that into the economy. we'll charge
interest on this money that we don't reallyhave. and it's a pretty good gimmick don't ya think?" and they go, "well, yeah, of course."and so that's how fractional reserve banking started. and now it's institutionalized and they teachit in school. no one ever questions the integrity of it or the ethics of it. they say, "well,that's the way banking works, and isn't it wonderful that we now have this flexible currencyand we have prosperity" and all these sorts of things. so it all starts with this conceptof fractional reserve banking. the trouble with that is that it works mostof the time. but every once and a while there are a few ripples that come along that area little bit bigger than the other ripples.
maybe one of them is a wave. and more thanseven percent will come in and ask for their gold. maybe twenty percent or thirty percent.and well, now the banks are embarrassed because the fraud is exposed. they say, "well we don'thave your gold" "what do you mean you don't have my gold!! i gave it to you and put iton deposit and you said you'd safe guard it." "well we don't have it, we loaned it out."so then the word gets out and everyone and their uncle comes out and lines up for theirgold. and of course they don't have it, the banks are closed, and they have bank holidays.banks are embarrassed, people lose their savings. you have these terrible banking crashes thatwere ricocheting all over the world prior to this time. and that is what caused theconcern of the american people. they didn't
want that anymore. they wanted to put a stopto that. and that was the whole purpose, supposedly,of the federal reserve system. was to put a stop to that. but since the people who designedthe plan to put a stop to it were the very ones who were doing it in the first place,you can not be surprised that their solution was not a very good one so far as the americanpeople were concerned. their solution was to expand it. not to control it, to expandit. see, prior to that time, this little game of fractional reserve banking was localizedat the state level. each state was doing its own little fractional reserve banking system.each state, in essence, had its own federal reserve. central banks were authorized bystate law to do this sort of thing. and that
was causing all this problem. so the federalreserve came along and said, "no no, we're not going to do this at the state level anymore,because look at all the problem it's causing. we're going to consolidate it all togetherand we're going to do it at the national level." the key to the system, of course, is who controlsthis incredible power to "regulate" the economy by setting reserve requirements and targetinginterest rates. the answer to this question, too, has been deliberately obscured. the federal reserve system is a deliberatelyconfusing mish-mash of public and private interests, reserve banks, boards and committees,centralized in washington and spread out across the united states.
so you have the federal reserve board in washingtonappointed by the president. that's the only part of this system that is directly dependenton the government for input that's the "federal" part: that the government--the president specifically--getsto choose a few select governors. the twelve regional banks--the most influential of whichis the federal reserve bank of new york which is essentially based in wall street to representwall street--is a representative of the major wall street banks who own shares in the private,not federal, but private federal reserve bank of new york. all of the other regional banksare also private banks. they vary according to how much influence they wield but the kansascity fed is influential, the st. louis fed, the dallas fed, but the new york fed is reallythe center of this system and precisely because
it represents the wall street banks who appointthe leadership of the new york fed. so the new york fed has a lot of public power,but no public accountability or oversight. it does not answer to congress the way thatthe chairman of the federal reserve board of governors does and even the chairman ofthe federal reserve board who is appointed by the president, does not answer to the president,does not answer to congress. he goes to congress to testify but the policy that they set isindependent. so they have no input from the government. the government can't tell themwhat to do legally speaking, and of course they don't. do you think it would cause problems for thefed or for the economy if that legislation
was to pass? my concern about the legislation is that ifthe gao is auditing not only the operational aspects of our programs and the details ofthe programs, but is making judgements about our policy decisions, that would effectivelybe a takeover of monetary policy by the congress, a repudiation of the independence of the federalreserve which would be highly destructive to the stability of the financial system,the dollar, and our national economic situation. the federal open market committee is responsiblefor setting interest rates. now this committee, which is enormously powerful, has as its membershipthe governor and vice chair of the federal reserve board, but on the federal open marketcommittee most of the membership is the presidents
of the regional federal reserve banks representingprivate interests. so they have significant input into setting the interest rates. interestrates are not set by a public body, they're set by private financial and corporate interests.and that's whose interests they serve, of course. the reason that the federal reserve goes tosuch great lengths to make its organizational structure as confusing as possible is to coverup the massive conflicts of interest that are at the heart of that system. the factis that the federal reserve system is comprised of a board of governors, 12 regional banks,and an open market committee. the privately-owned member banks of each federal reserve bankvote on the majority of the reserve bank's
directors, and the directors vote on membersto serve on the federal open market committee which determines monetary policy. what's more,wall street is given a prime seat at the table, with tradition holding that the presidentof the powerful new york federal reserve bank be given the vice chairmanship of the fomcand be made a permanent committee member. in effect, the private banks are the key determinantsin the composition of the fomc which regulates the entire economy. according to the fed "its monetary policydecisions do not have to be approved by the president or anyone else in the executiveor legislative branches of government, it does not receive funding appropriated by thecongress, and the terms of the members of
the board of governors span multiple presidentialand congressional terms." or, in the words of alan greenspan: "the federalreserve is an independent agency and that means there is no other agency of governmentthat can overrule actions that we take." the fed goes on in its self-mythologizationto state that it is "not a private, profit-making institution." this characterization is dishonestat best, and an outright lie at worst. the regional banks are themselves privatecorporations, as noted in a 1928 supreme court ruling: "instrumentalities like the nationalbanks or the federal reserve banks, in which there are private interests, are not departmentsof the government. they are private corporations in which the government has an interest."this point is even admitted by the federal
reserve's own senior counsel. yvonne mizusawa: our regulations do specifyoverall terms for the lending, but the day to day operation of the banking activitiesare conducted by the federal reserve banks. they are banks, and indeed they do lend... peter w. hall: so they're their own agency,then, essentially, in that regard. yvonne mizusawa: they are not agencies, yourhonor, they are "persons" under foia. each federal reserve bank, the stock is owned bythe member banks in the district, 100% privately held, they are private boards of directors.the majority of those boards are appointed by the independent banks, private banks inthe district. they are not agencies.
these private corporations issue shares thatare held by the member banks that make up the system, making the banks the ultimateowners of the federal reserve banks. although the fed's profits are returned to the treasuryeach year, the member banks' shares of the fed do earn them a 6% dividend. accordingto the fed, the fixed nature of these returns mean that they are not being held for profit. despite the dishonest nature of this description,however, it is important to understand that the bankers who own the federal reserve indeeddo not make their money from the fed directly. instead, the benefits are much less obvious,and much more insidious. the simplest way that this can be understood is that, as acentury of history and the specific example
of the last financial crisis shows, the fedwas used as a vehicle to bail out the very bankers who own the fed banks in the mostobvious example of fascistic collusion imaginable. a handful of financial institutions have enrichedthemselves as a result of institutional speculation on a large scale, as well as manipulationof the market. and secondly what they have done is that they have then gone to theirgovernments and said, "well, we are now in a very difficult situation and you need tolend us...you need to give us money so that we can retain the stability of the financialsystem." and who actually lends the money, or brokersthe public debt? the same financial institutions that are the recipients of the bailout. andso what you have is a circular process. it's
a diabolical process. you're lending money...no,you're not lending money, you're handing money to the large financial instutions, and thenthis is leading up to mounting public debt in the trillions. and then you say to thefinancial institutions "we need to establish a new set of treasury bills and governmentbonds, etc." which of course are sold to the public, but they are always brokered throughthe financial institutions which establish their viability and so on and so forth. andthe financial institutions will probably buy part of this public debt so that in effectwhat the government is doing is financing its own indebtedness through the bailouts.it hands money to the banks, but to hand money to the banks, it becomes indebted to thosesame financial institutions, and then it says
"we now have to emit large amounts of publicdebt. please can you help us?" and then the banks will say: "well, your books are notquite in order." and then the government will say: "obviously they're not in order becausewe've just handed you 1.4 trillion dollars of bailout money and we're now in a very difficultsituation. so we need to borrow money from the people who are in fact the recipientsof the bailout." so this is really what we're dealing with.we're dealing with a circular process. the 2008 crisis and subsequent bailouts aremerely the latest and most brazen examples of the fundamental conflicts of interest atthe heart of america's privately-owned central banking system.
beginning with the collapse of lehman bros.in september of that year, the federal reserve embarked on an unprecedented program of bailoutsand special zero interest lending facilities for the very banks that had caused the subprimemeltdown in the first place. by the cartelization of the federal reserve structure, and thusnot by accident, it was the very bank presidents who had overseen their banks' lending practicesthat ended up in the director positions of the federal reserve banks that voted on whereto direct the trillions of dollars in bailout money. and unsurprisingly, they directed ittoward their own banks. a stunning 2011 government accountabilityoffice report examined $16 trillion of bailout facilities extended by the fed in the wakeof the crisis and exposed numerous examples
of blatant conflicts of interest. jeffreyimmelt, chief executive of general electric served as a director on the board of the federalreserve bank of new york at the same time the fed provided $16 billion in financingto general electric. jp morgan chase chief executive, jamie dimon, meanwhile, was alsoa member of the board of the new york fed during the period that saw $391 billion infed emergency lending directed to his own bank. in all, federal reserve board memberswere tied to $4 trillion in loans to their own banks. these funds were not simply usedto keep these banks afloat, but actually to return these fed-connected banks to a periodof record profits in the same period that the average worker saw their real wages actuallydecrease and the economy on main street slow
to a standstill. then fed chairman ben bernanke was confrontedabout these conflicts of interest by senator bernie sanders upon the release of the gaoreport in june 2012. senator, you raised an important point, whichis that this is not something the federal reserve created. this is in the statute. congressin the federal reserve act said "this is the governance of the federal reserve." and morespecifically that bankers would be on the 6 out of 9. sorry? 6 out of 9 in the regional banks are fromthe banking industry.
that's correct. and that is in the law. i'llanswer your question, though. the answer to your question is that congress set this up,i think we've made it into something useful and valuable. we do get information from it.but if congress wants to change it, of course we will work with you to find alternatives. bernanke is completely right. these conflictsare in fact a part of the institution itself. a structural feature of the federal reservethat was baked into the federal reserve act itself over 100 years ago by the bankers whoconspired to cartelize the nation's money supply. you could not ask for a more succinctreason why the federal reserve itself, this admitted cartel of banking interests, needsto be abolished...but you could get one.
we now know that for centuries the peopleof the united states have been at war with the international banking oligarchs. thatwar was lost, seemingly for good, in 1913, with the creation of the federal reserve.with the passage of the federal reserve act, president woodrow wilson consigned the americanpopulation to a century in which the money supply itself has depended on the whims ofthe banking cabal. a century of booms and busts, bubbles and depressions, has led toa wholesale redistribution of wealth toward those at the very top of the system. at thebottom, the masses toil in relative poverty, single-income households becoming double-incomehouseholds out of necessity, their quality of life being slowly eroded as the federalreserve notes that pass for dollars are themselves
devalued. worse yet, the fraud itself perpetuates alexanderhamilton's persistent myth that a national debt is necessary at all. the us is now lockedinto a system whereby the government issues bonds to generate the funds for their operations,bonds that are backed up by the taxation of the public's own labor. the perpetrators of this fraud, meanwhile,remain in the shadows, largely ignored by a general public that could instantly recognisethe latest hollywood heartthrob or pop idol, but have no clue what the head of goldmansachs or the new york fed does, let alone who they are. this cabal bear allegiance tono nationality, no philosophy or creed, no
code of ethics. they are not even motivatedby greed, but power. the power that the control of the money supply inevitably brings with it. itdid not take long for this lust for power to rear its head. in 1921, just 7 years after the fed began operations, the same j.p. morgan-connectedbanking elite that founded the federal reserve incorporated an organization called the councilon foreign relations with the goal of taking over the foreign policy apparatus of the unitedstates, including the state department. in this quest, it was remarkably successful.although there are only about 4000 members
in the organization today, its membershiphas included 21 secretaries of defense, 18 treasury secretaries, 18 secretaries of state,16 cia directors and many other high-ranking government officials, military officers, businesselite, and, of course, bankers. the first director of the cfr was john w. davis, j.p.morgan's personal lawyer and a millionaire in his own right. together with its sister organizations inbritain and elsewhere around the world, these groups would work together toward what theycalled a "new world order" of total financial and political control directed by the bankersthemselves. as carroll quigley, noted georgetown historian and mentor of bill clinton, wrotein his 1966 work, tragedy and hope: a history
of the world in our time: "the powers of financial capitalism had [a]far-reaching aim, nothing less than to create a world system of financial control in privatehands able to dominate the political system of each country and the economy of the worldas a whole. this system was to be controlled in a feudalist fashion by the central banksof the world acting in concert, by secret agreements arrived at in frequent privatemeetings and conferences. the apex of the system was to be the bank for internationalsettlements in basel, switzerland, a private bank owned and controlled by the world's centralbanks which were themselves private corporations." this is why the bankers and their partnersin government and business conspired to bring
about the 2008 crisis. not for the pursuitof money, but power. in the same way the bankers used the panic of 1907 to consolidate theircontrol over the money supply, they hope to use the 2008 crisis and subsequent panics,which they themselves have created, to consolidate their political control. the inevitable conclusion, one that flowsnecessarily from the true understanding of this situation, is that the federal reservesystem needs to be consigned to the dustbin of history. after a century of enslavement,it is time for the american public to finally throw off the bankers' debt chains. if there was ever a point in human historyto start questioning alternatives, this would
be it. and to think that where we are...andsimply say "oh, well this is the best of our options," how many of the best options leadto self-destruction? doesn't sound like a best option. i think that with a world of seven billionpeople we can probably come up with something better than a system in which a few thousandpeople benefit so much at the expense of everything else on this world and at the expense of thepotential for the future of mankind. they're leveraging our future and so long as we acceptthis way of thinking, so long as we accept these institutions as having dominance, that'sthe direction we'll be going. so i think reform is a good way to try andstall and to push back directly against the
expanding and evolving power structures, butradical change is what's really needed and that has to be built from the bottom up. buti think that these two processes can and should go together in parallel. if you've made it this far, congratulations.you are now better informed on the economic history of the united states and the truthabout the federal reserve than 99% of the population. if you do nothing else, then justworking to get those around you educated on this information alone will have a profoundeffect. once they learn of the scam, many are motivated to do something about it, andthey, in turn, inform others. this is the viral nature of suppressed truth, and it isthe reason that more people are aware of and
energized by the issue of the federal reserveand the nature of money than ever before. perhaps even more amazingly, this movementis spreading to other parts of the globe. recognizing the interlocking nature of themodern global economy, and the international nature of the banking oligarchy, movementsto abolish the federal reserve have sprung up in europe, where protests against the cartelizedcentral banking system are taking place in over 100 cities attracting 20,000 people ona weekly basis. i started this movement because i realizedthat the federal reserve act, in my opinion, is one of the worst laws in the whole world.so a private banking company is lending america the money, and in my opinion is not democraticanymore. the federal reserve tells the government
what to do, and that's the problem. it's a very big problem, especially in theu.s. why is it a global issue, and why are people doing it here in germany? because when you realize that this financesystem, it's a global system, you have to go really to the beginning of the system.and in my opinion it's also the world bank and the international monetary fund and stufflike this, but at the beginning of all this is a law from 1913. woodrow wilson signedit, and this is the beginning of all this hardcore capitalism we are now suffering from.and the only way to stop this is maybe to break this law.
but what if the burgeoning movement to endthe fed is successful? what system do people propose as the answer? there have been severalproposals along different lines by various researchers. some argue for a return to america'scolonial roots of debt-free money issued by state run banks, pointing to the bank of northdakota as one already functioning, successful model of this approach. we've had two banking systems ever since the1860's with the state bank system and the federal bank system, and the federal banksystem are the big wall street banks particularly. they dominate the federal system. so, they'retaking over right now. in california we don't even have any local banks where i am. we hadtwo and i had accounts in both of them and
now one of them is chase bank and the otheris u.s. bank. so they're both big wall street banks now that have been taken over. so it's the local banks that have an interestin serving the local business. the big banks have no interest in making loans to localbusinesses; it's too risky, why should they bother? they've got this virtually free moneythey can get from the fed and from each other and it's much more lucrative to them eitherto speculate in commodities or other thing abroad, or what works very well for them isto buy long-term government bonds at 3% because these have no capital requirement. the capitalrequirements for government bonds are zero. so they can buy all of those that they want.whereas if they make loans for mortgages or
they make loans to businesses then they haveto worry about the capital requirement and as soon as they've used up all their capital--inother words eight dollars in capital will get you a hundred dollars of loans--then theycan't make any more loans they have to wait for thirty years for the loans to get paidoff. so what they if they do if they do buy mortgages is sell them off too investors andso that's the whole mortgage backed security scam that we've seen. they had no motivationto make sure that these borrowers were actually sound borrowers; they just wanted to makea sale. so they sold the stuff to the unwary investors who might be somebody in icelandor sweden or pension funds. so that didn't work out so well.
so a state bank partnering with the localbanks can provide the capital. it can help them with capital. in north dakota the statebank guarantees the loans of the local banks, allowing them to make much bigger loans thanthey could otherwise. the state bank provides liquidity to the small banks. that's why thelocal banks aren't making loans to small business right now, because they don't know that theycan get money from the other banks as needed. the way banking works is they make the loanfirst. i mean, if you have credit lines to many different businesses and if they allhit up their credit lines at once you are going to run out of money. so you don't daredo that unless you know that you can get short-term loans from the other banks. and so what'shappening right now, even though there's $1.6
trillion is excess reserves sitting on thebooks of the big banks, they're not available to the little banks and the reason is becausethe fed is paying 0.25% interest on those reserves. so the banks have no incentive tolend them to the little banks. why let go of them when you can make just as much keepingthem and then you still have your reserves and you can use them as collateral to buybonds or something that'll make you more money? so the whole system is messed up and in northdakota, the bank of north dakota provides liquidity for these local banks. others advocate a decentralized system ofalternative and competing currencies that greatly reduce or even eliminate altogetherthe need for a central bank.
well, 22 years ago in ithaca, new york i noticedthere were a lot of people, friends particularly, that had skills and time that were not beingemployed or respected by the prevailing economy. while we had much desire to create thingsand trade them with each other and many services we could provide to each other, we didn'thave the money. so since i have a background in graphic design, journalism and arrogancei went to my computer and designed paper money for ithaca, new york. i designed pretty colourfulmoney with pictures of children, waterfalls and trolley cars denominated in hours of labor.one-hour note, half-hour, quarter, eight-hour notes and two-hour notes. i then began toissue to each of those pioneer traders who had agreed to being listed in the directorya specific starter amount, and the game began.
an hour has been worth basically $10 u.s.dollars which at that time 20 years ago was double the minimum wage. people who usuallyexpect more than $10 per hour of their service can charge multiple hours per hour but thedenomination puts between us as residents of our community, that reminds us that weare fellow citizens, not merely winners or losers scrambling for dollars. it introducesus to each other on the basis of these skills and services that we have, that we are moreproud to provide for each other than often is the case with a conventional job. justthe stuff we have to do to get the money to pay the bills. so through that trading process, that moreintimate scale process within the community,
we're more easily able to become friends andlovers and political allies. it's an inspiring story. and tell people abouthow much money has circulated through this community. i mean, it's important for peopleto understand just how successful this has been. because we are not a computer system we don'thave a specific volume of trading recorded but by the grapevine, by phone surveys andover the years watching the money move we were able to guess very reliably that severalmillion dollars equivalent of this money has transacted over those years. making loanswithout charging interest up to $30,000 value, which is the fundamental monetary revolutionin our system. then as well, making grants
of the money to over a hundred community organizations. some argue for currencies whose mathematicalnature prevent them from being merely conjured into existence whenever a federal governmentwants to wage another war of aggression or forge another link in the seemingly endlesstrain of governmental tyranny and abuse. what people have to understand about bitcoinis that it's a completely decentralized network. there's no central server, there's no controllingcompany, there's no office, it's just free software that anyone can download and startrunning on their computer anywhere in the world. and that the bitcoins themselves canbe transferred to or from anyone, anywhere in the world and it's impossible for any bankor government or entity to block you from
sending or receiving those bitcoins. there'sa limited supply of those bitcoins, there will never ever be anymore than 21 millionbitcoins. so, like everything the price is set based on supply and demand. because thesupply of bitcoins is limited and the demand is increasing as more and more people startto use them and more and more websites start to accept them, the price of bitcoins in termsof dollars is going to have to increase, even a lot more than the $500 per bitcoin thatit is today. are there any drawbacks at all to the ideaof using a crypto-currency? if you're part of the current power elitethat can just print money at will to spend on whatever you feel like then yeah, the worldswitching over to bitcoin is probably not
going to benefit you. but if your one of thenormal people that aren't working for the federal reserve or any central bank that'sprinting money to pay to your friends and that sort of thing, then a bitcoin world isa wonderful thing for you. sound money. cryptocurrencies. state banks.lets programs. self-issued credit. these and many other solutions have all been proposedand many of them are in use in different localities today. information on all of these ideas andhow they are being applied in various parts of the world are widely available online today.the point is that the question of what money is and how it should be created is perhapsthe single greatest question facing humanity as a whole, and yet it is one that has beenalmost completely eliminated from the national
conversation...until recently. for the first time in living memory, peopleare once again rallying around the monetary issue, and american politics stands on thethreshold of a transformation almost unimaginable just two decades ago. and so the rest of the story is now in ourhands. once we understand the scam that has taken place, the gradual consolidation ofwealth and power in the hands of an elite few banking oligarchs and the growing impoverishmentof the masses, all in the name of banking funny money created out of nothing and loanedto the public at interest, we can choose to get active or to do nothing at all.
for those who choose to get active, thereare some steps that you can take to help change the course of this system: 1) follow the links and resources from thetranscript of this documentary at corbettreport.com/federalreserve to familiarize yourself with the history,the connections and the functions of the federal reserve system. if you can't explain thismaterial to yourself then you will never be able to teach it to others. 2) begin reaching out to others to bring themup to speed on the issue. it can be as simple as broaching this conversation in the mondaymorning water cooler talk or passing out a copy of this documentary or sending out linksto this information to your email list. insert
this topic into your conversations. when peoplestart talking about the national debt or the state of the economy or other political talkingpoints, get them to question the roots of these issues, and why there is a nationaldebt at all. 3) when you are able to find or create a groupof like-minded people in your area who are engaged with the issue, start a study groupon the issue and its solutions. the study group can help source alternative or complementarycurrencies in the local area, or, if none exist already, the group can form the basisfor a community of local businesses and customers who are willing to start experimenting withways to wean themselves off of the federal reserve notes.
4) use the resources at corbettreport.com,including the federal reserve information flyer, or hold dvd screenings, to attractinterest in your group and draw others into studying the true nature of the monetary system. the work of building up an alternative tothe current system can seem daunting, even at times overwhelming. but it's importantto keep in mind that the federal reserve system that seems so monolithic today has only beenaround for one century. central banks have been defeated in america before and they canbe defeated again. the question of how we decide to change thissystem is not rhetorical; it will either be answered by an informed, engaged, active populationworking together to create viable alternatives
and to dismantle the current system, or itwill be answered by the same banking oligarchy that has been controlling the money supply,and indeed the lifeblood of the country, for generations. now, one century after the creation of thefederal reserve system, we have a choice to make: whether the next century, like the onebefore it, will be a century of enslavement, or, transformed by the actions and choicesthat we make in the light of this knowledge, a century of empowerment.