Most people don’t understand the so-called Federal Reserve System. They don’t know:
Because of that ignorance, we all assume that its name and the deference it receives from the media and politicians means- it must be an important Federal agency.
The former is true. It is important, except not in the way you might expect.
The latter is a deception. It is not a Federal agency. It has no reserves. And it is not a system but rather a monopolized cartel of private international financiers (not even banks serving the public in reality).
Let’s take a deeper dip into the waters of the Federal Reserve System to see what there is to celebrate about an organization which has a strangle hold on our economy.
The following description of the Federal Reserve was excerpted from a dialogue presented on 12/23/13 on National Public Radio’s Morning Edition by Robert Smith, Jacob Goldstein and Liaquat Ahamed with David Greene as host. Some of this story has been condensed to preserve space, but not altered.
The following is an example of how the media spins “facts” while managing to leave out important details about what actually happened. Knowingly or unknowingly leaving out known facts makes a difference.
The listener should expect an investigative reporter approach to be a thorough approach. This would be especially important if they are covering the background of an institution as influential as the Federal Reserve.
Unfortunately, what is left unsaid in this discussion about the Federal Reserve is critically important for listeners to know.
Greene (Intro to the Topic): And now to a financial panic that was far more widespread. It was at the beginning of the last century and it lead to the creation of our federal reserve system a hundred years ago today.
Before that, the U.S. didn’t have a central bank to create money and set interest rates. Robert Smith and Jacob Goldstein from our Planet Money team have the story of the Fed’s birth.
It involves a secret expedition and a grumpy old man with multiple mistresses. [J.P. Morgan]
The story of the Fed really starts back in 1907. It’s a year after the great San Francisco earthquake and the U.S. economy is in trouble. Unemployment is up and people are panicking. They’re rushing to pull their money out of the banks.
At this point, in 1907, the U.S. government had no way to deal with a panic like this. There was no institution that could step in and stop the run on the banks.
Ahamed: And so J.P. Morgan draws up a list. It says 25 million. This is how much each one of you owes and says, “Okay, sign here.”
And they don’t sign.
So he locks the doors and this was the door that was locked.
So Morgan called together all the bankers on a Saturday night and he said, “We can stop this run, but to do it we’re going to have to pool our money to restore confidence.”
He says, “We’re not leaving until I’ve got all the signatures.”
By 5:00 in the morning, they had all signed, and that essentially was the end of the panic of 1907.
But even after the panic, some people were still worried. Do we really want the the fate of the U.S. economy to hinge on one rich guy in New York?
Relying on J.P. Morgan to bail out the U.S. financial system didn’t make sense, particularly since J.P. Morgan was 70 and liked to go off travelling with his bevy of middle-aged mistresses, so… (end of excerpt)
Sounds convincing doesn’t it? Perhaps, except some important details are being left out of the description of the panic and how it was resolved.
By 1907, a year after Teddy Roosevelt’s re-election, Morgan again tried to push for a central bank.
When coercion at the level of discussion did not work, they resorted to more financially forceful methodology. Using their combined financial muscle, Morgan and his friends were secretly able to crash the stock market.
Thousands of small banks were vastly over extended, some had reserves less than one percent, thanks to the principle of fractional reserves (discussed later on in this series).
Within days, bank runs were common across the nation.
Morgan stepped into the public arena as the knight on the white horse and promised to prop up the faltering American economy. He would support the failing banks with his money. Money that he actually manufactured out of nothing. (Used to start up the two previous failed central banks in our nation btw- referred to as fiat [by decree] money.)
Morgan printed 200 million dollars in completely worthless, private money and bought things with it, paid for services with it and sent some of it to his branch banks to lend out at interest.
The scheme worked. At least it appeared to for the moment. A scheme which could never have been pulled off without government looking the other way to allow Morgan’s manufactured money to be used for the “bail outs”.
Soon the public regained their confidence in money. They quit hording their currency. However, as a result, banking power was further consolidated into the hands of a few large banks.
By 1908 the panic was over. Morgan was hailed as a hero by the president of Princeton University, Woodrow Wilson:
All this trouble could be averted if we appointed a committee of six or seven public-spirited men like J.P. Morgan to handle the affairs of our country.
Wilson would later become President of the United States. When the Federal Reserve proposal was generated during his Presidential term and presented to Congress he supported the Fed of course.
Later economic textbooks would claim that the creation of the Federal Reserve system was a direct result of the panic of 1907:
With the alarming epidemic of bank failures the country was fed up once and for all with the anarchy of unstable private banking.
However Minnesota congressman Charles A. Lindbergh Sr, father of Lucky Lindy, would later explain that the panic of 1907 was really nothing more than a scam perpetrated by J.P. Morgan and other banking interests.
Those not favorable to the money trust could be squeezed out of business and the people frightened into demanding changes in the banking and currency laws which the Money Trust would frame.
The deception was just beginning to surface. Later on more details would surface but too late to change anything as anticipated.
An ordinary citizen with well over a decade of study devoted to uncovering the truth about government and authorities. Deception is fostered by the omission of key information, background or facts. This is an important way in which your mind is being controlled. Whatever entity controls your mental frame also controls your life. Filling in the background and gaps helps you understand the impact and intent of government/authorities on your life, Better informed, you will take more meaningful actions to help restore your lost freedoms
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