What You Need To Know About Money

TheTruthwillrise | October 13, 2010

Most people do not know how money really works or where it comes from. In this video, I shed some light on that.

 

 

 

 

It’s not fair to destroy the dollar and cheat responsible savers! – Ron Paul to Ben Bernanke

WATCH OUT FEDERAL RESERVE: Senate agrees to expanded ‘Audit the Fed’ provision

GREAT NEWS: the Senate committee that is currently working on a compromise Wall Street reform bill to reconcile with the House version has agreed to expand an audit of the privately owned and controlled Federal Reserve.

While still not a total probe of the Federal Reserve System, the measure is being sold as a first step toward complete transparency of the U.S. central bank. Both the Senate and the House have already passed legislation that is intended to rein in the casino-like behavior on Wall Street. However, these two bills are noticeably different and have to be worked out in committee.

The House’s version would mandate multiple audits of the Fed’s discount windows and open market dealings, which would shed light on the Federal Reserve’s lending activity with U.S. and foreign banks. On the other hand, the Senate’s bill calls for only one audit.

Legislators are now hard at work on a compromise bill that addresses the disparities.

According to published reports, senators in committee have agreed to allow repeated audits of the Fed’s key functions. This will finally give the American public a window into how the central bank works to benefit the “banksters” themselves.

No one knows the exact details yet. But populist Americans are optimistic that whatever comes out of committee is going to impact the speculators and traders on Wall Street, who have driven the U.S. economy to the brink of collapse.

One online commentator remarked on the bill: “The details of the final proposal are still being worked out, but momentum is with advocates of Federal Reserve transparency.”

That is good news.

But even better news is the fact that, according to a new analysis by one of the largest banks in the world, the proposed Wall Street reforms will cost Wall Street as much as a quarter of its annual profits.

Citigroup reports that Goldman Sachs could lose as much as 23 percent of its profits when financial reform passes. Morgan Stanley could lose nearly 20 percent. JP Morgan is facing a hit of 18 percent, and Bank of America could see up to 16 percent of its gains disappear over night.

The losses are attributed to increased regulations that will force financial firms to cough up more of their own money to back the bets they make. There are also a host of new fees and taxes that will go in effect, which the
money trust will have to pay.

Inflation: The Tax You Don’t Notice

It is often said ” money doesn’t go as far as it used to” . Most people chalk it up to rising prices or greedy companies and take it no further. However that is not truly the case. If people realized they were in actuality paying a hidden tax, they may ask some serious questions.

The American people pay scores of taxes on everything from gasoline to gurdles and everything in between. One of the least known and most insidious is known as inflation.

To understand inflation,one must have a basic understanding of how our banking and monetary system works. In short, our money does not in fact come from the treasury, but is loaned to the government by a private corporation known as the Federal Reserve. As with any loan, there is interest attached to it, which is why we have the income tax. This private corporation has a monopoly over the money supply and because of that the only place the “money” can come from to pay for the debt is from the Fed, they have to constantly increase the money supply to pay for it. Since our money is no longer backed by anything (i.e gold, silver), putting more money into the circulation only decreases the value of the currency.

A simple illustration of this is you buy a pound of meat for $1 and then more currency is put into circulation, that additional currency has decreased its buying power, thus it takes more of it to buy the same amount of goods and to reflect that diminished value the “price” of the meat increases to $1.50.

What this means for you is you must work more to maintain even your current standard of living. The cost of living adjustments that people receive are mere pittance, designed to appease and pacify a population that, for the most part, have no idea what is befalling them.

This is why it is imperative that sound money be restored. It would halt the erosion of our currency’s buying power and severely stifle inflation. Executive Order 11110, which allows the treasury to issue silver backed United States notes rather than fiat Federal Reserve notes should be reactivated. Bills such as HR 1207 which audits the Federal Reserve, HR 2750, which abolishes the Fed, need to be supported and passed in their original form.

The alternative is an ever decreasing currency, having to work even more and eventually a collapse of the currency and economy. The choice is yours.

Why the Fed Likes Independence

Why the Fed Likes Independence

By Ron Paul 01/12/2010

Dr. Ron Paul is a Republican member of Congress from Texas.

Last week it was revealed that when Treasury Secretary Tim Geithner was Chairman of the New

York Federal Reserve, he urged AIG officials not to disclose to the Securities Exchange

Commission relevant details of agreements with banks to bail out Goldman Sachs. Apparently he

felt at the time that regulators and the public would be angry that taxpayer money was used to fully

compensate bankers who made some horrifically bad investment decisions. These banks should

have suffered the consequences of the huge risks they were taking. After all, they kept plenty of

rewards when times were good. Instead, the Fed found a way to socialize these major losses so

these banks could survive and continue making more bad decisions, at the expense of the American

people and the value of the dollar.

Geithner claims that they had to take politically unpopular actions to save the economy from

collapse. Half of that is right – it was politically unpopular, but it is extremely premature at best, to

claim the economy has been saved. It was just reported that 85,000 more jobs in December.

Unemployment stands at 10 percent officially, and 22 percent according to more traditional

calculations. It is hard to argue that this sort of government waste has done anything but harm to

our economy. Raiding Main Street to bail out Wall Street is a foolish idea. Main Street productivity

and the strength of the dollar is the bedrock of the economy. You cannot gut this foundation without

eventually toppling everything else. This is what too many policy makers either don’t understand or

refuse to face. Or even worse, perhaps they do understand, but don’t care!

In any case, this revelation makes precisely my point about the need for Fed transparency. This

claim that the Fed should have “independence” is a canard. They very much enjoy their comfortable

pattern of bailing out friends and devaluing the currency with no oversight and no accountability.

Geithner specifically asked officials at AIG not to disclose to the SEC or to the public particulars

about this special deal for his friends. We only know these details now because AIG was eventually

forthcoming when Congress demanded some answers.

We should be getting this information, and information on all such dealings, straight from the Fed.

The Fed should be accountable to Congress because it is a creature of Congress. The Constitution

gives Congress the authority to oversee the integrity of the monetary unit. We have unwisely and

unconstitutionally delegated this authority to the Federal Reserve, which has in turn devalued our

dollar by 95 percent and counting. When the Federal Reserve engages in harmful policies,

Congress is still ultimately responsible. If the Fed is not made accountable through a GAO audit at

least, it will continue to be accountable to no one, and that is unacceptable.

 

Geithner expects to be praised and thanked for his actions instead of rebuked and fired. He

expects to be given more power to engage in “experimental” monetary policy in the future. But he

has just given us a very good idea of what the Fed and Treasury would do with more power, what

they consider good monetary policy, and why they like their so-called independence.

High-stakes duel between Rep. Paul and Bernanke intensifies

By Silla Brush

Rep. Ron Paul and Ben Bernanke are locked in a clash of titans.

Paul, the 74-year-old House libertarian from Texas with the high-pitched voice, has fought for decades to kill off the Federal Reserve.

Bernanke, the mild-mannered ex-Princeton professor and chairman of the bank, is waging a high-stakes battle for the Fed’s reputation. And he’s doing everything possible to knock out Paul.

The fight is still in the early rounds. But with the full House expected to vote this week to give government auditors more power to scrutinize the Fed, Paul has the upper hand.

The Senate is a much more difficult round for Paul, though a similar stew of liberal and conservative support is starting to simmer in the upper chamber behind the Republican’s wonky auditing measure.

Bernanke and Paul have never met one-on-one behind closed doors, Paul’s office said. The battle has taken place in public — on blogs, with grassroots activists and during congressional hearings.

Bernanke has testified against the provision, given lengthy media interviews, written op-eds and attempted to lift the cloud of secrecy that hangs over the bank.

The Fed is audited, he argues, but allowing government scrutiny of interest rate decisions will politicize the Fed. Opening the door to congressionally requested audits would compromise the market’s confidence in the bank.

Paul, a longstanding supporter of a new gold standard, made his case formally in his recently published book, End the Fed.

The 2008 presidential candidate’s crusade is no longer a quixotic quest. He is a prime beneficiary of the grassroots anger this year against government bailouts for Wall Street.

First introduced in February, Paul’s bill to audit the Fed has gained 317 co-sponsors, a shocking three-quarters of the House. The bill has not won over many Democrats in leadership, but it has picked up several committee chairmen, including Reps. Bart Gordon (Tenn.), Jim Oberstar (Minn.) and John Spratt (S.C.).

Rep. Alan Grayson (D-Fla.), a prominent Paul ally on the bill, has provided a huge boost to the effort with his firebrand strain of liberal politics.
Grayson has publicly slammed the Fed, going so far as calling its top lobbyist a “K Street whore” before apologizing. Paul himself said the full force of “lobbyists for the Fed” is stacked against him.

As the popularity of the Paul-Grayson measure rose this year, Bernanke’s fell.

Praised by many economists for taking the necessary steps to right the economy over the last year, his overall public approval has soured. A Rasmussen poll in November showed that just 21 percent of those surveyed thought Bernanke should be reappointed. Meanwhile, 79 percent of those polled said auditing the Fed is a good idea.

Republicans have jumped behind Paul, who stood out in last year’s GOP presidential primary for his outspokenness against the Iraq war.

“There needs to be Fed independence and accountability for those dollars to at least look back at those decisions,” said Rep. Kevin Brady (R-Texas).

But the political value is plain as Republicans argue the government is taking too large a role in the economy.

“The Fed becomes for Republicans a very convenient, always controversial, always misunderstood, very specific whipping boy that they can ride to potential victory in 2010 and 2012,” said a Washington-based financial lobbyist.

Bernanke has the normally powerful Rep. Barney Frank (D-Mass.) in his corner. But as chairman of the House Financial Services Committee, Frank couldn’t eke out a compromise.

Frank rarely loses battles, but an attempt — with Rep. Mel Watt (D-N.C.) — at a deal on the audit issue simply fell short at the committee level. Liberal activist Robert Borosage, who is campaigning against Bernanke’s nomination for a second term, said the compromise effort was nothing more than “the establishment alternative.”

The committee voted 43-26 in favor of Paul’s amendment as 15 Democrats on the panel bucked Frank.

The vote drew a bright line between the senior Democrats atop the committee and the freshman and sophomore members.

“I think some of the newer members are in the most vulnerable districts,” said Rep. Brad Miller (D-N.C.), a Paul-Grayson co-sponsor who instead joined Frank in voting against the Paul amendment. “They were certainly getting the calls that I was getting, and they were reading the politics differently.”

Frank and Paul are both veterans of the House, and while they are on nearly opposite ends of the political spectrum, they have a mutual respect. The two have worked closely on an Internet gaming measure.

Many Democrats and Republicans on Capitol Hill say that Frank, despite his partisan rhetoric, is a pragmatist.

“I never felt [Frank] was against me,” Paul said.

Frank said last week the language wouldn’t be changed when the House heads for the vote. Ten of the 13 House members on the Rules Committee are among Paul’s backers, including Chairwoman Louise Slaughter (D-N.Y.).

“Absent some change in the way the public is reacting, I don’t see any changes,” Frank said. “I think there is this tension within the Republican Party. A lot of their people who traditionally have a lot of influence are troubled by this, but they may be cowed by the anger at the Fed.”

In the Senate, Paul has found support from Sens. Jim DeMint, the conservative Republican from South Carolina, and Bernie Sanders, the Independent from Vermont who calls himself a proud socialist.

A left-right coalition of interest groups on the outside is joining forces against Bernanke.

Audit the Fed Congressional Hearing

Barney Frank and Mel Watt must go! The people of Massachussetts  and North Carolina respectively needs to get rid of both of these guys as it is obvious they are in the bankers’ pockets!

 

 

 

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Common Sense 2009

Larry Flynt

The Huffington Post
August 20, 2009

The American government — which we once called our government — has been taken over by Wall Street, the mega-corporations and the super-rich. They are the ones who decide our fate. It is this group of powerful elites, the people President Franklin D. Roosevelt called “economic royalists,” who choose our elected officials — indeed, our very form of government. Both Democrats and Republicans dance to the tune of their corporate masters. In America, corporations do not control the government. In America, corporations are the government.

Here’s what Rockefeller said in 1994 at a U.N. dinner: “We are on the verge of a global transformation. All we need is the right major crisis, and the nations will accept the New World Order.” They’re gaming us. Our country has been stolen from us.

 

 

 

 

 

 

 

 

 

 

 

This was never more obvious than with the Wall Street bailout, whereby the very corporations that caused the collapse of our economy were rewarded with taxpayer dollars. So arrogant, so smug were they that, without a moment’s hesitation, they took our money — yours and mine — to pay their executives multimillion-dollar bonuses, something they continue doing to this very day. They have no shame. They don’t care what you and I think about them. Henry Kissinger refers to us as “useless eaters.”

But, you say, we have elected a candidate of change. To which I respond: Do these words of President Obama sound like change?

“A culture of irresponsibility took root, from Wall Street to Washington to Main Street.”

“And a regulatory regime basically crafted in the wake of a 20th-century economic crisis — the Great Depression — was overwhelmed by the speed, scope and sophistication of a 21st-century global economy.”

This is nonsense.

The reason Wall Street was able to game the system the way it did — knowing that they would become rich at the expense of the American people (oh, yes, they most certainly knew that) — was because the financial elite had bribed our legislators to roll back the protections enacted after the Stock Market Crash of 1929.

Congress gutted the Glass-Steagall Act, which separated commercial lending banks from investment banks, and passed the Commodity Futures Modernization Act, which allowed for self-regulation with no oversight. The Securities and Exchange Commission subsequently revised its rules to allow for even less oversight — and we’ve all seen how well that worked out. To date, no serious legislation has been offered by the Obama administration to correct these problems.

Instead, Obama wants to increase the oversight power of the Federal Reserve. Never mind that it already had significant oversight power before our most recent economic meltdown, yet failed to take action. Never mind that the Fed is not a government agency but a cartel of private bankers that cannot be held accountable by Washington. Whatever the Fed does with these supposed new oversight powers will be behind closed doors.

 

• A d v e r t i s e m e n t
• 

Obama’s failure to act sends one message loud and clear: He cannot stand up to the powerful Wall Street interests that supplied the bulk of his campaign money for the 2008 election. Nor, for that matter, can Congress, for much the same reason.

Consider what multibillionaire banker David Rockefeller wrote in his 2002 memoirs:

“Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure — one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.”

Read Rockefeller’s words again. He actually admits to working against the “best interests of the United States.”

Need more? Here’s what Rockefeller said in 1994 at a U.N. dinner: “We are on the verge of a global transformation. All we need is the right major crisis, and the nations will accept the New World Order.” They’re gaming us. Our country has been stolen from us.

Journalist Matt Taibbi, writing in Rolling Stone, notes that esteemed economist John Kenneth Galbraith laid the 1929 crash at the feet of banking giant Goldman Sachs. Taibbi goes on to say that Goldman Sachs has been behind every other economic downturn as well, including the most recent one. As if that wasn’t enough, Goldman Sachs even had a hand in pushing gas prices up to $4 a gallon.

The problem with bankers is longstanding. Here’s what one of our Founding Fathers, Thomas Jefferson, had to say about them:

“If the American people ever allow private banks to control the issuance of their currency, first by inflation, and then by deflation, the banks and the corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their father’s conquered.”

We all know that the first American Revolution officially began in 1776, with the Declaration of Independence. Less well known is that the single strongest motivating factor for revolution was the colonists’ attempt to free themselves from the Bank of England. But how many of you know about the second revolution, referred to by historians as Shays’ Rebellion? It took place in 1786-87, and once again the banks were the cause. This time they were putting the screws to America’s farmers.

Daniel Shays was a farmer in western Massachusetts. Like many other farmers of the day, he was being driven into bankruptcy by the banks’ predatory lending practices. (Sound familiar?) Rallying other farmers to his side, Shays led his rebels in an attack on the courts and the local armory. The rebellion itself failed, but a message had been sent: The bankers (and the politicians who supported them) ultimately backed off. As Thomas Jefferson famously quipped in regard to the insurrection: “A little rebellion now and then is a good thing. The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”

Perhaps it’s time to consider that option once again.

I’m calling for a national strike, one designed to close the country down for a day. The intent? Real campaign-finance reform and strong restrictions on lobbying. Because nothing will change until we take corporate money out of politics. Nothing will improve until our politicians are once again answerable to their constituents, not the rich and powerful.

Let’s set a date. No one goes to work. No one buys anything. And if that isn’t effective — if the politicians ignore us — we do it again. And again. And again.

The real war is not between the left and the right. It is between the average American and the ruling class. If we come together on this single issue, everything else will resolve itself. It’s time we took back our government from those who would make us their slaves.

Max Keiser on Alex Jones 8/6/2009: The Fed’s Dirty Little Secret is Out!

 

 

Fed Chairman ‘Forgets’Banks He Loaned Half Trillion $

By Christopher J. Petherick

 

Ben Bernanke, the head of the privately owned and controlled Federal Reserve, cannot remember to which foreign banks the Fed has loaned a half trillion dollars. His lack of memory can be understood, given that the Fed has loaned or guaranteed trillions of U.S. dollars to banks around the world since the U.S. economy took a turn for the worse in the summer of 2008. Still, it was quite an embarrassment for the country’s top banker, who, during a three-hour grilling on July 21 before the House Committee on Financial Services, admitted he did not know the recipients of foreign liquidity swaps—loans to foreign financial entities—that amounted to some
$550 billion.

Shortly after news broke of Bernanke on the hot seat, video of his testimony spread like wildfire on the Internet with hundreds of thousands of viewers around the world watching the chief banker stutter and squirm. Here is the relevant portion of the official transcript relating the exchange between Bernanke and Rep. Alan Grayson (D-Fla.), who is also a sponsor of Rep. Ron Paul’s landmark “Audit the Fed” legislation (H.R. 1207).

Grayson: “What’s that [the $553 billion amount]?”

Bernanke: “Those are swaps that were done with  foreign central banks. Many foreign banks are short dollars. . . .”

Grayson: “So who got the money?”

Bernanke: “Financial institutions in Europe and other countries.”

Grayson: “Which ones?”

Bernanke: “I don’t know.”

Grayson: “Half a trillion dollars, and you don’t know who got the money?”

Grayson was following up on earlier testimony by Bernanke, who said that loans to foreign banks had increased from $24 billion at the end of 2007 to $553 billion at the end of 2008. That is a 2,300 percent increase in one year for anyone doing the math.

Grayson and Bernanke were debating complicated global financial transactions known as foreign liquidity swaps, whereupon the Federal Reserve gives U.S. dollars to foreign financial entities, usually foreign central banks. In return for dollars, the foreign institutions usually hold an equivalent amount of their own currencies in accounts for the Fed.

Officially, the Federal Reserve states, “When the foreign central bank lends the dollars it obtained by drawing on its swap line to institutions in its jurisdiction, the dollars are transferred from the foreign central bank’s account at the Federal Reserve to the account of the bank that the borrowing institution uses to clear its dollar transactions.”

Translated from banker-speak, the U.S. dollars, in a nutshell, are going to back unstipulated loans in countries around the world.

As of now, the Fed has dollar liquidity swap lines open with 13 foreign central banks. These include the Reserve Bank of Australia, the Central Bank of Brazil, the Bank of Canada, Denmark’s National Bank, the Bank of England, the European Central Bank, the Bank of Korea, the Bank of Mexico, the Reserve Bank of New Zealand, Norway’s Norges Bank, the Monetary Authority of Singapore, Sweden’s Sveriges Riksbank, and the Swiss National Bank.

Bernanke tried to clarify the need for the swaps, saying that foreign central banks are short of U.S. dollars and come into the U.S. market, driving up interest rates. “We swap our currency dollar for their currency,” said Bernanke. “They take dollars and lend to banks in their jurisdiction.”

Grayson responded that his staff had looked into some of the swaps, including a $9 billion dollar loan to New Zealand. That works out to $3,000 for every citizen in New Zealand, he said.

“Seriously, wouldn’t it have been better to extend that kind of credit to Americans rather than New Zealanders?” asked Grayson.

Putting aside the constitutionality of lending dollars to foreign banks—strictly speaking, neither the Federal Reserve nor the fractional reserve banking system is constitutional—there are considerable dangers associated with these types of transactions. Should the “swapped” foreign currency lose value, and the foreign bank balk at paying back the loan at the agreed-upon rate, the Federal Reserve and the dollar could be dragged down with them. Also, should the U.S.-backed foreign loans go bad, the whole system could go down like dominoes with foreign central banks taking down the Federal Reserve and the U.S. economy.

It’s a dangerous game the U.S. private central bank is playing with the American people’s money, all the more reason why it should be opened up to public scrutiny. With no clue as to the solvency of the Federal Reserve, Rep. Paul’s “Audit the Bill” looks better and better every day.

UPDATE: Since AFP last went to press on July 22, another legislator—Rep. DonYoung (R-Alaska)—has signed on to sponsor Rep. Paul’s audit the Fed bill, bringing the number of supporters in the House to
276.