Tuesday, December 11, 2007

Federal Reserve rate cuts



The interest rate that affects your credit cards, car payments and home equity lines of credit dropped a smidgenTuesday afternoon. The Federal Reserve lowered the short-term rate hoping to goose an economy some fear is teetering on recession. Stocks plunged following the Fed's announcement...


Here is what the rates have looked like over the past couple of years.




SO WAIT! Wait a second... whooooaaaa

The Federal Reserve controls the interest rates I pay on my credit cards and my car payments? And even on the home equity? Why would the government raise these rates?

What if I were to tell you that the Federal Reserve isn't controlled or monitored by the government.

YES CLASS. IT'S TIME FOR INTERACTIVE TIME! (small applause)

Q: So where did the Federal Reserve come from?

A: In 1913, Woodrow Wilson rushed to implement the Federal Reserve Act of 1913, a few days before the Holidays so it would be met with very little opposition. December 23, 1913 to be exact.

Q: Why would he do it with little say from the senate or anyone else?

A: The Federal Reserve, or Central Bank, is not a bank controlled by the government. Hell, our laws don't even govern them. It is owned by private members.

Q: Who worked to get this Act working?

A: A Group of bankers went and spent 10 days at Jekyll Island, Georgia. The executives included Frank Vanderlip, president of the National City Bank of New York, associated with the Rockefellers; Henry Davison, senior partner of J.P. Morgan Company; Charles D. Norton, president of the First National Bank of New York; and Col. Edward House, who would later become President Woodrow Wilson's closest adviser and founder of the Council on Foreign Relations.[5] There, Paul Warburg of Kuhn, Loeb, & Co. directed the proceedings and wrote the primary features of what would be called the Aldrich Plan. Warburg would later write that "The matter of a uniform discount rate (interest rate) was discussed and settled at Jekyll Island." Vanderlip wrote in his 1935 autobiography From Farmboy to Financier:

I was as secretive, indeed I was as furtive as any conspirator. Discovery, weknew, simply must not happen, or else all our time and effort would have beenwasted. If it were to be exposed that our particular group had got together andwritten a banking bill, that bill would have no chance whatever of passage by Congress…I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System.”


So why the secrecy? Were they trying to fool the American public out of their money? You bet your fuzzy ass they were.

Q: So does the Federal Reserve just control Interest rates?

A: NO! They also control our money supply.

Before the Federal Reserve Act, our money was backed by gold and silver. You can see on our money in 1905 (shown below) it was even printed that it was backed by gold.



Today, you'll read on the 1, 5, 10, 20, 50, 100 that it no longer says this. It says "Legal Tender". Which means it's BACKED BY NOTHING!

So what does this mean? It means that they can print out a dollar, loan it to the U.S. government to issue to the population and charge them interest on it.

So for argument sake, lets say that they print $1 and issue it to the U.S. Government. Now with interest, that $1 is now costing the U.S. Government $2. So where does the government get the $2 to repay the central bank? Since the Federal Reserve has a monopoly on our money, they print out the $2 give it to our government and once again charging interest.

See what's going on here? it's a viscious cycle. So basically they can print money out of thin air, and continue to do so for the sake of maintaining enough money in circulation.

So what you may ask? Well Money Supply is where we get our inflation from. Our dollar today is worth $.04 to the $1 it was worth in 1913, shortly before the Federal Reserve took control in November of 1914.

Here's an analogy for you:

If you walked up to me starving and on your last life and asked me for an apple to eat. You would cherish that apple. It would be your most prized possession and worth it's weight in gold!

But lets say I gave you 100 apples instead of just 1. Then you'd eat about 5 or so until you got full. Then realized that carrying 95 apples around was too difficult. You'd most likely just give away most of the apples or even throw a few of them away. It's worth is less to you now.

Same thing applies with Money. If you just continue to print and print and print, it's worth becomes less. This is why we see things cost $1.25 for the same item that used to cost $.05 in the 1950's.

What would our founding fathers say about a Central Bank? Well they had ideas on it too.

The colonies actually had their own money (as shown below). They were a very prosperous nation.

Benjamin Franklin:
“There was abundance in the Colonies, and peace was reigning on every border. It was difficult, and even impossible, to find a happier and more prosperous nation on all the surface of the globe. Comfort was prevailing in every home. The people, in general, kept the highest moral standards, and education was widely spread.”


“We have no poor houses in the Colonies; and if we had some, there would be nobody to put in them, since there is, in the Colonies, not a single unemployed person, neither beggars nor tramps.”


And as I said above, they had their own money, as Benjamin Franklin says below:
“That is simple. In the Colonies, we issue our own paper money. It is called ‘Colonial Scrip.’ We issue it in proper proportion to make the goods and pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one.”


Outraged, King George III from England outlawed colonial money! And forced them to deal with the England central bank (yes, central bank - just like the federal reserve of today).

The true cause of the revolutionary war wasn't taxation. Benjamin Franklin said:
“The Colonies would gladly have borne the little tax on tea and other matters had it not been the poverty caused by the bad influence of the English bankers on the Parliament, which has caused in the Colonies hatred of England and the Revolutionary War.”




So in short, things need to be changed. We need to abolish the income tax, and the federal reserve (inflation tax). We need to get back to a gold standard. Otherwise our economy will collapse (as you see it happening today).

So find a presidential candidate running that would support these actions. I'm not going to tell you who. Find one that best suits your needs and the needs of this country. Vote for them and spread the word. Change has to be made, or we could become a third world country. Just like how Russia went from Superpower to a Third world country.

1 comment:

MIke said...

Hey man, great job on this article. People in this country are worried about things like gay marriage and abortion when the very fabric of a country is on the brink of total disaster!!
Mike (from myspace)