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Who Owns The Federal Reserve?

muleman

Gone But Not Forgotten
GOLD Site Supporter
Who Owns The Federal Reserve?

By Ellen Brown
Global Research, January 29, 2013
Url of this article:
http://www.globalresearch.ca/who-owns-the-federal-reserve/10489


“Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders.”
– The Honorable Louis McFadden, Chairman of the House Banking and Currency Committee in the 1930s
The Federal Reserve (or Fed) has assumed sweeping new powers in the last year. In an unprecedented move in March 2008, the New York Fed advanced the funds for JPMorgan Chase Bank to buy investment bank Bear Stearns for pennies on the dollar. The deal was particularly controversial because Jamie Dimon, CEO of JPMorgan, sits on the board of the New York Fed and participated in the secret weekend negotiations.1 In September 2008, the Federal Reserve did something even more unprecedented, when it bought the world’s largest insurance company. The Fed announced on September 16 that it was giving an $85 billion loan to American International Group (AIG) for a nearly 80% stake in the mega-insurer. The Associated Press called it a “government takeover,” but this was no ordinary nationalization. Unlike the U.S. Treasury, which took over Fannie Mae and Freddie Mac the week before, the Fed is not a government-owned agency. Also unprecedented was the way the deal was funded. The Associated Press reported:
“The Treasury Department, for the first time in its history, said it would begin selling bonds for the Federal Reserve in an effort to help the central bank deal with its unprecedented borrowing needs.”2
This is extraordinary. Why is the Treasury issuing U.S. government bonds (or debt) to fund the Fed, which is itself supposedly “the lender of last resort” created to fund the banks and the federal government? Yahoo Finance reported on September 17:
“The Treasury is setting up a temporary financing program at the Fed’s request. The program will auction Treasury bills to raise cash for the Fed’s use. The initiative aims to help the Fed manage its balance sheet following its efforts to enhance its liquidity facilities over the previous few quarters.”
Normally, the Fed swaps green pieces of paper called Federal Reserve Notes for pink pieces of paper called U.S. bonds (the federal government’s I.O.U.s), in order to provide Congress with the dollars it cannot raise through taxes. Now, it seems, the government is issuing bonds, not for its own use, but for the use of the Fed! Perhaps the plan is to swap them with the banks’ dodgy derivatives collateral directly, without actually putting them up for sale to outside buyers. According to Wikipedia (which translates Fedspeak into somewhat clearer terms than the Fed’s own website):
“The Term Securities Lending Facility is a 28-day facility that will offer Treasury general collateral to the Federal Reserve Bank of New York’s primary dealers in exchange for other program-eligible collateral. It is intended to promote liquidity in the financing markets for Treasury and other collateral and thus to foster the functioning of financial markets more generally. . . . The resource allows dealers to switch debt that is less liquid for U.S. government securities that are easily tradable.”
“To switch debt that is less liquid for U.S. government securities that are easily tradable” means that the government gets the banks’ toxic derivative debt, and the banks get the government’s triple-A securities. Unlike the risky derivative debt, federal securities are considered “risk-free” for purposes of determining capital requirements, allowing the banks to improve their capital position so they can make new loans. (See E. Brown, “Bailout Bedlam,” webofdebt.com/articles, October 2, 2008.)
In its latest power play, on October 3, 2008, the Fed acquired the ability to pay interest to its member banks on the reserves the banks maintain at the Fed. Reuters reported on October 3:
“The U.S. Federal Reserve gained a key tactical tool from the $700 billion financial rescue package signed into law on Friday that will help it channel funds into parched credit markets. Tucked into the 451-page bill is a provision that lets the Fed pay interest on the reserves banks are required to hold at the central bank.”3
If the Fed’s money comes ultimately from the taxpayers, that means we the taxpayers are paying interest to the banks on the banks’ own reserves – reserves maintained for their own private profit. These increasingly controversial encroachments on the public purse warrant a closer look at the central banking scheme itself. Who owns the Federal Reserve, who actually controls it, where does it get its money, and whose interests is it serving?
Not Private and Not for Profit?
The Fed’s website insists that it is not a private corporation, is not operated for profit, and is not funded by Congress. But is that true? The Federal Reserve was set up in 1913 as a “lender of last resort” to backstop bank runs, following a particularly bad bank panic in 1907. The Fed’s mandate was then and continues to be to keep the private banking system intact; and that means keeping intact the system’s most valuable asset, a monopoly on creating the national money supply. Except for coins, every dollar in circulation is now created privately as a debt to the Federal Reserve or the banking system it heads.4 The Fed’s website attempts to gloss over its role as chief defender and protector of this private banking club, but let’s take a closer look. The website states:
* “The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations – possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.”
* “[The Federal Reserve] is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.”
* “The Federal Reserve’s income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. . . . After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury.”5
So let’s review:
1. The Fed is privately owned.
Its shareholders are private banks. In fact, 100% of its shareholders are private banks. None of its stock is owned by the government.
2. The fact that the Fed does not get “appropriations” from Congress basically means that it gets its money from Congress without congressional approval, by engaging in “open market operations.”
Here is how it works: When the government is short of funds, the Treasury issues bonds and delivers them to bond dealers, which auction them off. When the Fed wants to “expand the money supply” (create money), it steps in and buys bonds from these dealers with newly-issued dollars acquired by the Fed for the cost of writing them into an account on a computer screen. These maneuvers are called “open market operations” because the Fed buys the bonds on the “open market” from the bond dealers. The bonds then become the “reserves” that the banking establishment uses to back its loans. In another bit of sleight of hand known as “fractional reserve” lending, the same reserves are lent many times over, further expanding the money supply, generating interest for the banks with each loan. It was this money-creating process that prompted Wright Patman, Chairman of the House Banking and Currency Committee in the 1960s, to call the Federal Reserve “a total money-making machine.” He wrote:
“When the Federal Reserve writes a check for a government bond it does exactly what any bank does, it creates money, it created money purely and simply by writing a check.”
3. The Fed generates profits for its shareholders.
The interest on bonds acquired with its newly-issued Federal Reserve Notes pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders. A mere 6% a year may not be considered a profit in the world of Wall Street high finance, but most businesses that manage to cover all their expenses and give their shareholders a guaranteed 6% return are considered “for profit” corporations.
In addition to this guaranteed 6%, the banks will now be getting interest from the taxpayers on their “reserves.” The basic reserve requirement set by the Federal Reserve is 10%. The website of the Federal Reserve Bank of New York explains that as money is redeposited and relent throughout the banking system, this 10% held in “reserve” can be fanned into ten times that sum in loans; that is, $10,000 in reserves becomes $100,000 in loans. Federal Reserve Statistical Release H.8 puts the total “loans and leases in bank credit” as of September 24, 2008 at $7,049 billion. Ten percent of that is $700 billion. That means we the taxpayers will be paying interest to the banks on at least $700 billion annually – this so that the banks can retain the reserves to accumulate interest on ten times that sum in loans.
The banks earn these returns from the taxpayers for the privilege of having the banks’ interests protected by an all-powerful independent private central bank, even when those interests may be opposed to the taxpayers’ — for example, when the banks use their special status as private money creators to fund speculative derivative schemes that threaten to collapse the U.S. economy. Among other special benefits, banks and other financial institutions (but not other corporations) can borrow at the low Fed funds rate of about 2%. They can then turn around and put this money into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks. A long list of banks (but not other corporations) is also now protected from the short selling that can crash the price of other stocks.
Time to Change the Statute?
According to the Fed’s website, the control Congress has over the Federal Reserve is limited to this:
“[T]he Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute.”
As we know from watching the business news, “oversight” basically means that Congress gets to see the results when it’s over. The Fed periodically reports to Congress, but the Fed doesn’t ask; it tells. The only real leverage Congress has over the Fed is that it “can alter its responsibilities by statute.” It is time for Congress to exercise that leverage and make the Federal Reserve a truly federal agency, acting by and for the people through their elected representatives. If the Fed can demand AIG’s stock in return for an $85 billion loan to the mega-insurer, we can demand the Fed’s stock in return for the trillion-or-so dollars we’ll be advancing to bail out the private banking system from its follies.
If the Fed were actually a federal agency, the government could issue U.S. legal tender directly, avoiding an unnecessary interest-bearing debt to private middlemen who create the money out of thin air themselves. Among other benefits to the taxpayers. a truly “federal” Federal Reserve could lend the full faith and credit of the United States to state and local governments interest-free, cutting the cost of infrastructure in half, restoring the thriving local economies of earlier decades.
 

Bamby

New member
Only One Solution to the Fed Debt Trap

The Oxford Dictionary of Proverbs lists the oldest written version of the saying "what you don't know can't hurt you" as coming from playwright George Pettie's Petit Palace in 1576:

"So long as I know it not, it hurteth me not."

Several Rothschild-controlled centuries later, what Americans don't know about "the Fed" may be fatal.

The Fed gained control of America's money in 1913. Government debt now soars toward $17 trillion. Interest paid to service this debt, for the year 2011 alone, was $454,393,280,417.03, largely funneled by the Fed to eight international banking families:

Rothschild’s of London and Berlin; Lazard Brothers of Paris; Israel Moses Seaf of Italy; Kuhn, Loeb & Co. of Germany and New York; Warburg & Company of Hamburg, Germany; Lehman Brothers of New York; Goldman, Sachs of New York; Rockefeller Brothers of New York.

Ever heard a better argument for entitlement reform?

Rothschild wealth alone is estimated at $500 trillion.

Keeping the America public ignorant of why debt crises and threatened government shutdowns are a semi-automatic ruse aimed at social programs; reinforcing that cherished ignorance is a vital function of mainstream corporate media (MSM). Prevailing "see no evil, hear no evil, speak no evil" public attitudes toward the Fed are boosted by the trouble decent people have even imagining such an epic crime…there must be a law! Then, there's faith…I really want to believe the Fed is part of the federal government.

No matter how many times former Fed Chairman Alan Greenspan and others remind us that the Fed is an untouchable independent agency, people like to believe what they want to believe, regardless.

An image problem with our country's first two Rothschild-controlled central banks was transparency of the name, "U.S. Central bank", or "BUS" (Bank of the United States).

Our current "Federal Reserve System"…now there's a name with enough mojo to span a century, and even juice Congress into re-chartering the Fed for another 100 years (to 2113). MSM went totally mild.

In terms of persona, the Fed is Bela Lugosi. Spooky, deadly-secretive, omniscient, riveting…the Fed sounds like part of the federal government, sounds backed with reserves…a "system" instead of a bank—all a fiendishly-charming triple play. When the Fed walks into the room, heads turn. When the Fed controls a superpower's money, heads roll.

Dollars From Thin Air

A dominant way to bank dollars from thin air is the Federal Reserve System's entitlement.

For instance, to circulate another billion dollars of fiat currency, our government does not print debt-free U.S. Treasury Notes, as mandated in the Constitution. Instead, a billion dollars of debt (Treasury bonds) are given to the Fed, who then creates from nothing a billion dollars in Federal Reserve Notes and loans them to the government at compound interest. Whether it’s currency, or digits on a computer screen, by creating money this way, the amount of debt created is always more than the dollars created, leaving no way for the debt to ever be paid off.

Entitlements are one thing; the Fed's exclusive dollar monopoly seems otherworldly. Could there be a greater entitlement than ownership of the dollar with accountability to no one?

By auctioning its (free) Treasury bonds through "Open Market Operations", the Fed helps spread U.S. debt around the world.

1913 was a brutal year for U.S. public interest. The Federal Reserve Act, and the 16th Amendment (federal income tax) both began transferring wealth from the public to the elite in 1913. So much money is needed to finance government debt created by private central banking, a personal income tax is demanded.

When you write a check to the IRS…notice the endorsement on the payment coupon: “Pay any F.R.B. Branch or Gen. Depository for credit U.S. Treas. This is in payment of US. oblig."

In other words, Pay the Fed.

Fractional Reserve Banking is another magical mystery machine for creating money from nothing, or as George Bush I blabbed:

"…the continuous consolidation of wealth and power into higher, tighter and righter hands."

Bush I was talking about the reason for Iran-Contra, but wealth consolidation is what power is all about. Power to the People is exactly what the Fed is not about.

One of the Fed's duties is regulating reserve requirements of member bank, currently 3% to 10%, depending….

Fractional-Reserve money creation, most simply: A bank at 10% reserve requirement gets a $100 deposit. The bank is allowed to lend $90 dollars of that deposit, so the original $100 dollars has become $190…and through subsequent lending, the bank may inflate the original $100 deposit into $1,000 dollars. A foundational transfer from those who create wealth, to those who manipulate wealth.

TARP

"Troubled Assets Relief Program"—taxpayers must relieve the global financial system of its bad bets. But….

How can an asset be "troubled"? People can be troubled, as upon learning festered secrets of private central banking. Indeed, private central banking reduces people to assets ripe for austerity. So doesn't "troubled assets" seem a better label for taxpayers than for bad bets?

The global financial system is a casino with private profit and public risk, thanks largely to something power keeps people from thinking about, much less understanding: Derivatives.

“Derivative” is a well-groomed way to say a side bet has been made on anything you might imagine. A Bloomberg article from October 18, 2011, described them this way:

Derivatives are financial instruments used to hedge risks or for speculation. They're derived from stocks, bonds, loans, currencies and commodities, or linked to specific events such as changes in the weather or interest rates.

Often highly-leveraged, derivatives prowl a mostly-unregulated market dominated by international banks of the Too-Big…! variety. Irresistible roulette, derivatives are the wicked queen of casino finance.

Taxpayers on the hook for, officially…$700 billion—or was that $800 billion, officially, to bail out Too-Big…! banks? Remember the ephemeral public outrage? The image of Treasury Secretary Henry Paulson (between stints at Goldman Sachs) going down on one knee to beg Speaker of the House Nancy Pelosi to pass TARP before the world imploded—that image should be tattooed upon the mass American consciousness.

However, MSM has minimized the image to barely a footnote that at least characterizes the science/art of bait-and-switch.

Taxpayer liability from TARP is closer to $23.7 trillion, and thanks to the Fed, forever inflating.

An Odd Audit

The Fed is a private agency not subject to the Freedom of Information Act, and the Fed threw enough power at reinforcing this fact to make it shocking that Congress mustered enough votes to actually force a peek into some of the Fed’s books.

Since the Fed serves the interests of its owners, the Government Accountability Office (GAO) “limited audit” gave MSM plenty to suppress.

Between December 1, 2007 and July 21, 2010, the Fed gave $16.1 trillion to banks and corporations around the world—loans virtually free, backstopped by the American public.

Recipients listed on page 131 of the "audit report":

Citigroup – $2.513 trillion

Morgan Stanley – $2.041 trillion

Merrill Lynch – $1.949 trillion

Bank of America – $1.344 trillion

Barclays PLC – $868 billion

Bear Sterns – $853 billion

Goldman Sachs – $814 billion

Royal Bank of Scotland – $541 billion

JP Morgan Chase – $391 billion

Deutsche Bank – $354 billion

UBS – $287 billion

Credit Suisse – $262 billion

Lehman Brothers – $183 billion

Bank of Scotland – $181 billion

BNP Paribas – $175 billion

Wells Fargo – $159 billion

Dexia – $159 billion

Wachovia – $142 billion

Dresdner Bank – $135 billion

Societe Generale – $124 billion

“All Other Borrowers” – $2.639 trillion

"Quantitative Easing"

In the middle of December, 2012, the Fed announced another Quantitative Easing (QE-4). In addition to QE-3 creating new money to transform $40 billion of toxic waste on bank balance sheets into taxpayer liabilities, QE-4 bumps the monthly taxpayer tab up to $85 billion.

A quip amid Weimar Germany hyperinflation went something like this: "If a wheelbarrow full of money were left on the street, thieves would dump the money, and steal the wheelbarrow."

How much more Quantitative Easing will it take to deliver America's Weimar Moment?

Since the Federal Reserve Act in 1913, the dollar has lost 95% of its purchasing power.

In the four years since QE-1 (middle of the last "financial crisis"), the dollar's value in gold has fallen more than 50%.

Early in 2012, the Federal Reserve Open Market Committee announced the Fed's goal of devaluing the dollar 33% over the next twenty years.

With dollar creation running wide open, and QE-3/QE-4 pouring $85 billion each month to scrub toxic waste from banks' balance sheets, America's Weimar Moment approaches the horizon.

We should have paid attention to Louis McFadden:

"The Federal Reserve (banks) are one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this Nation is run by the International Bankers."

And:

“Some people think the Federal Reserve Banks are the United States government’s institutions. They are not government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign swindlers” (Congressional Record 12595-12603 — Louis T. McFadden, Chairman of the Committee on Banking and Currency June 10, 1932).

Or Lindbergh:

“The financial system has been turned over to the Federal Reserve Board. That Board as ministers the finance system by authority of a purely profiteering group. The system is Private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people’s money.” (Charles A. Lindbergh Sr., 1923)

Prominent Americans have long pointed out that the Fed is a private banking cartel designed to systematically destroy the dollar, drain wealth of the American public and crush the federal government with debt.

Ben Bernanke, current chairman of the Fed, actually told truth about the Great Depression in his speech at a University of Chicago conference honoring the 90th birthday of Milton Friedman, concluding with:

“Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again."

MSM excels at suppressing leaked documents and defector testimony that clearly reveal the Fed’s zeal over the thousands of banks and farms they hoped to acquire for pennies on the dollar by inducing a depression. MSM has also protected the public from the truth that derivatives were at the heart of the 2008 financial crisis, and will define the next crisis.

Estimates of the notional value of the global derivatives market range from $600 trillion to $1.4 quadrillion. Webster Tarpley said this about derivatives:

“Far from being some arcane or marginal activity, financial derivatives have come to represent the principal business of the financier oligarchy in Wall Street, the City of London, Frankfurt, and other money centers. A concerted effort has been made by politicians and the news media to hide and camouflage the central role played by derivative speculation in the economic disasters of recent years. Journalists and public relations types have done everything possible to avoid even mentioning derivatives, coining phrases like "toxic assets," "exotic instruments," and – most notably – "troubled assets," as in Troubled Assets Relief Program or TARP, aka the monstrous $800 billion bailout of Wall Street speculators which was enacted in October 2008…."

With their ownership of MSM, and history of doing whatever they want—including whatever it takes to protect their dollar entitlement, the Fed might seem impossible to root out. And regardless of how severely they try to complicate the whole Fed crime, our choice is exquisitely simple:

Kill the Fed or the Fed will kill us.

Our only other choice is limping from economic bubble to bursting economic bubble, hobbled by debt and drenched in austerity until we can limp no more. And if MSM ever publicly calls derivatives, “derivatives”, it’s far too late. The imminent financial crisis will render public interest a ghost from a distant past.

The only epoch offering Americans a future: the Fed, AD.

The Fed, after death.

Bela Lugosi liked to say, "There is no…other way."

Source
 

mla2ofus

Well-known member
GOLD Site Supporter
Thanks, Bamby!! It's amazing what the love of money will do to anyone's morals.
Mike
 

Kane

New member
Rothschild wealth alone is estimated at $500 trillion.
This is skimmed from the money supply by these well-placed greedy bastards, never to return to the People. The cabal formed on Jeckyl Island in 1913 is the most ruthless ever in the history of the Planet.

And we, The People, are the suckers.

And even more sinister, is how these few obscenely rich bastards manipulate the daily spot value of gold. One day soon the jig will be up.
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