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Central Banking

The Problem is Money ..... Duh!

Submitted by Roanman on Sun, 11/02/2014 - 15:16

If you take a minute to understand how our money is created, the perversity and corruption in our system will become clear. And, when I say system, I mean our monetary system to be sure, but also our entire system of government as it functions today.

Most of our money starts out in life as debt. When the Federal Government of the United States of America decides that it needs money that it otherwise does not have, it issues debt ….. bonds.  Those bonds are sold at auction by the Treasury Department.  Much if not most all of these bonds are purchased by a group of twenty or so large, mostly Wall Street banks designated by The Federal Reserve Bank as "Primary Dealers".

Interestingly, The Federal Reserve Bank or "The Fed" as it is commonly known is not an agency of the Federal Government of the United States of America as one would reasonably expect by virtue of it's name.  It rather is a privately held institution, owned in large part by ..... wait for it ..... the "Primary Dealers.  The Federal Reserve Bank adds or subtracts money from the economy by trading government bonds with the "Primary Dealers", mostly always at a profit to the "Primary Dealers".

Purchasing bonds from the "Primary Dealers" injects cash into the economy as the Federal Reserve simply makes a journal entry into it’s own computer system for it's own account, and in so doing it deposits a sum of money which did not exist one instant before and thus some number of billions of dollars of new money is born out of thin air.  It only dies when the Fed subsequently sells those bonds back into the economy, thus drawing cash out of the economy, or when the government pays that money back by redeeming it's previously issued bonds.  In other words, that money is for the most part immortal.

The Federal Government of the United States of America then pays the required interest on this debt out of tax revenue.

Lately the Federal Reserve Bank has on occasion been buying the bonds back from the "Primary Dealers" the very next day following their original purchase by the "Primary Dealers" from the Treasury Department.  This enables these preferred banks to buy the next batch of new bonds and then subsequently resell them to the Federal Reserve Bank at another profit whenever the Federal Government of the United States of America again decides that it needs to spend some money that it does not have.  Usually, that would be tomorrow.

This is the nuts and bolts of the proceedure commonly referred to as "Monetizing The Debt".

Here is where it gets real interesting ..... at least to me.  Congress is empowered by the Constitution to “coin” money without ever having to fool around with The Fed, issuing bonds, debt or making interest payments. U.S. Constitution - Article 1 Section 8 begins as follows: The Congress shall have Power To ….. some stuff you should probably take the time to read ….. Clause 5, “Coin Money, regulate the Value thereof” ….. and then some other stuff you should probably also take the time to read.  Congress punted on that right with the passage of The Federal Reserve Act of 1913, which Act created The Federal Reserve Bank as a privately held institution.

Were the Federal Government of the United States of America or any other nation in the world for that matter, to simply make it's own entry into it’s own account at it's own bank, rather than the privately owned institution that it now banks with, there would be no debt, no sale of bonds and no need to pay any subsequent interest payments out of tax receipts.

There most certainly would be instances of inflation, which would most certainly be underreported by a legion of governmental economists kept on the payroll, in one way or another, for purposes of massaging numbers in an effort to obscure the true rate of inflation in a cynical effort to evade accountability to the American people.  BUT ..... how is any of that different from what we have today?

The hidden benefit here is of course that there would be no insider profits to be had for the "Primary Dealers”.  Which profits they are presently using for the purchase of among other things, legislation that suits their own special interests, largely to the detriment of the American people.  That last part there is just my opinion.

Were we to simply cut out the middle man by chartering a bank that is wholly owned by the American people through the Federal Government of the United States of America and let it give birth to it's own money, a lot of our problems, most notably our debt, would become a whole lot more manageable.

Doesn't that strike you as an ever so much better approach?  It certainly worked for Andrew Jackson.

 

Central Banking

Submitted by Roanman on Wed, 08/28/2013 - 10:02

 

In the year of 2000 there were seven countries whose economies operated without a privately owned central bank, they were:

Afghanistan

Iraq

Sudan

Libya

Iran

Generally accepted "terrorist" hotbeds all.

Cuba

North Korea

Those well known human rights abusers.

 

Today, thanks to the yoeman efforts of both the Bush and the Obama administrations on behalf of the world's central bankers, only three remain:

Cuba

North Korea

Iran

 

It doesn't take much reading up on this stuff before pretty quick you come across the Rothschilds, Khazarian vs. Abrahamic Jews, Synagogue of Satan stuff, the Rockefellers, Trilateral Commission, the Bank for International Settlements, Bilderbergs and The Council on Foreign Relations etc., all of which completely saturates this conversation.

And, all of which, while fun and most likely mostly true, completely misses the point.

That point being, why on earth would any nation put it's national bank and thus it's supply of money in the hands of privately held interests rather than in the hands of a democratically elected or governmentally appointed body, and thus provide public oversight of the peoples money?

The reason is obvious, ... at least to us ... a privately held central bank enriches banks and bankers, or in other words, the Rothschilds, Rockefellers, denizens of The Council on Foreign Relation, Trilateral Commission, Bilderbergs, Bank for International Settlements, Goldman Sachs, JP Morgan and the other Primary Dealers, all at the expense of ordinary citizens. 

You can think and think and think and think and think and think and think and think and you will not come up with a system for funding your government that is more damaging to the average citizen.

I don't care what it is that you care about when it comes to politics, whether you are of the right or the left, liberal, conservative, socialist, communist, libertarian, anarchist, ambivalent or just plain disgusted, there is absolutely no possibility of achieving anything of your dreams for your nation until the money supply is ripped from the hands of the privately owned central bankers and vested with your nation's citizenry.

Where it obviously, will undoubtedy, absolutely and damn near immediately go FUBAR ......... but FUBAR in most of the world's economies lately, rates as a significant improvement. 

Until people seize control of the supply of their money, it ain't their country.

They are simply tenants or indentured servants or in the term of the day, "debt slaves".

Because ..... If it ain't your money, it ain't your country.

 

The MIT "Engineers"

Submitted by Roanman on Thu, 12/13/2012 - 06:51

 

It's been a while since we've used two pieces from The Wall Street Journal in one week's time, but they're on a roll lately.

We took practically all of this piece because something is different in WSJ's linking system for this article and we found it to be very worthwhile. The link in the photo below will take you to a companion interview with WSJ writer John Hilsenrath on this group of unelected geniuses that are endeavoring mightily, while dining elegantly, to make your money worthless.

Do I seem bitter?

 

Inside the Risky Bets of Central Banks

By JON HILSENRATH and BRIAN BLACKSTONE

 

 

BASEL, Switzerland—Every two months, more than a dozen bankers meet here on Sunday evenings to talk and dine on the 18th floor of a cylindrical building looking out on the Rhine.

The dinner discussions on money and economics are more than academic. At the table are the chiefs of the world's biggest central banks, representing countries that annually produce more than $51 trillion of gross domestic product, three-quarters of the world's economic output.

Of late, these secret talks have focused on global economic troubles and the aggressive measures by central banks to manage their national economies. Since 2007, central banks have flooded the world financial system with more than $11 trillion. Faced with weak recoveries and Europe's churning economic problems, the effort has accelerated. The biggest central banks plan to pump billions more into government bonds, mortgages and business loans.

Their monetary strategy isn't found in standard textbooks. The central bankers are, in effect, conducting a high-stakes experiment, drawing in part on academic work by some of the men who studied and taught at the Massachusetts Institute of Technology in the 1970s and 1980s.

While many national governments, including the U.S., have failed to agree on fiscal policy—how best to balance tax revenues with spending during slow growth—the central bankers have forged their own path, independent of voters and politicians, bound by frequent conversations and relationships stretching back to university days.

The U.S. Federal Reserve now buys $40 billion of mortgage-backed securities each month and appears set at a meeting Wednesday to spend billions more on Treasury securities. The Bank of England has agreed to funnel billions of pounds to businesses and households through banks. The European Central Bank pledged to hold down borrowing costs of governments that sought help. The Bank of Japan, under increased pressure to fight deflation, is purchasing ¥91 trillion yen ($1.14 trillion) in government bonds, corporate debt and stocks.

The goal is to lower borrowing costs and stimulate stock markets to encourage spending and investment by households and business. But the method is untested on such a global scale, and central bankers have labored in behind-the-scenes meetings this year to size up the risks.

Central banks control the spigot of the world's money supply. When opened, the flow of new cash heats up economies, driving down interest rates and unemployment but risking inflation. Closing the spigot, on the other hand, raises interest rates and cools economies but tamps down prices.

The central bankers have promised that once the global economy gets back on its feet, they will shut off the spigots quickly enough to forestall inflation. But pulling back so much money, at exactly the right time, could become a political and logistical challenge.

"We're all very conscious that we're in an environment that's unusual and we're using a policy weapon that we don't have a lot of experience with," Charles Bean, deputy governor of the Bank of England said in an interview.

Central bankers themselves are among the most isolated people in government. If they confer too closely with private bankers, they risk unsettling markets or giving traders an unfair advantage. And to maintain their independence, they try to keep politicians at a distance.

Since the financial crisis erupted in late 2007, they have relied on each other for counsel. Together, they helped arrest the downward spiral of the world economy, pushing down interest rates to historic lows while pumping trillions of dollars, euros, pounds and yen into ailing banks and markets.

Three of the world's most powerful central bankers launched their careers in a building known as "E52," home to the MIT economics department. Fed ChairmanBen Bernanke and ECB President Mario Draghi earned their Ph.D.s there in the late 1970s. Bank of England Governor Mervyn King taught briefly there in the 1980s, sharing an office with Mr. Bernanke.

Many economists emerged from MIT with a belief that government could help to smooth out economic downturns. Central banks play a particularly important role in this view, not only by setting interest rates but also by influencing public expectations through carefully worded statements.

While at MIT, the central bankers dreamed up mathematical models and discussed their ideas in seminar rooms and at cheap food joints in a rundown Boston-area neighborhood on the Charles River.

Over Sunday dinners in Basel, which often stretch to three hours, they now talk of pressing, real-world problems with authority. The meals are part of two-day meetings held six times a year at the BIS. Dinner guests include leaders of the Fed, ECB, Bank of England and Bank of Japan, as well as central bankers from India, China, Mexico, Brazil and a few other countries.

The Bank of England's Mr. King leads the dinner discussions in a room decorated by the Swiss architectural firm Herzog & de Meuron, which designed the "Bird's Nest" stadium for the Beijing Olympics. The men have designated seats at a round table in a dining area scented by white orchids and framed by white walls, a black ceiling and panoramic views.

"It is a way in which people can talk completely privately," Mr. King said in an interview. "It is a big advantage if you have some feel for how central banks think about questions, what they're likely to do in the future if certain events were to occur."

Serious matters follow appetizers, wine and small talk, according to people familiar with the dinners. Mr. King typically asks his colleagues to talk about the outlook in their respective countries. Others ask follow-up questions. The gatherings yield no transcripts or minutes. No staff is allowed.

The 18-member group, formally known as the Economic Consultative Committee, has only once issued a public statement: a two-line missive in September, promising to look for solutions in interbank lending markets, responding to allegations that some private banks had conspired to manipulate the Libor interest rate.

On Mondays after the dinner, the bankers join a larger group of central bankers at a large round table on a lower floor of the BIS building, which is shaped like a rook chess piece. Staff members sit nearby at desks decorated in white leather.

"These meetings are a very important forum to understand the global situation," said Duvvuri Subbarao, governor of the Reserve Bank of India and a Sunday dinner participant. "People speak freely."

"Every time there is quantitative easing by the Fed, that gets discussed," said Mr. Subbarao. "We all have to reckon with the spillover impact of our policies on other countries." Basel, he said, is the place to air such concerns.

The role of the Bank for International Settlements has broadened since it was formed in 1930 to handle reparation payments imposed on Germany after World War I. In the 1970s, it became the center of discussions on bank capital rules. In the 1990s, it became the meeting place for central bankers to talk about the global economy.

The central bankers typically stop short of formally coordinating their moves. Mr. Bernanke, Mr. Draghi and Bank of Japan head Masaaki Shirakawa are more focused on domestic challenges. Mr. Shirakawa has often warned others in Basel about the effectiveness of easy money policies, according to people familiar with his statements. That hesitance has made the BOJ an issue in Sunday's Japan elections. Shinzo Abe, the front-runner to become prime minister, has promised to rein in the BOJ's independence and demand more aggressive efforts to end consumer price deflation.

But as central bankers grapple with doubts and disagreements over reviving the global economy, they form a tightknit fraternity, tied by efforts to manage growth and gird against financial instability. Their relationships play out during conversations by phone and in person.

"A big secret of central bank cooperation," Mr. King said, "is that you can just pick up a phone and have an agreement on something very quickly" in a crisis.

This summer, the central banking clique kept in close touch as they readied for a new round of monetary activism. On June 8, Mr. Bernanke and Mr. King spoke by phone for a half-hour before policy meetings at their central banks, according to Mr. Bernanke's phone records, obtained in a public records request. A few days later, Mr. Bernanke spoke by phone with Mark Carney, head of the Bank of Canada—and last month named as Mr. King's successor. Shortly after, Mr. Bernanke called Stanley Fischer, head of the Bank of Israel, and a former MIT professor who was Mr. Bernanke's dissertation adviser.

On June 18, Mr. Bernanke had an early morning call from his home on Capitol Hill with Mr. Draghi and Mr. King, according to his phone records, as the men assessed the impact of the Greek election on Europe's financial system.

Two conflicting views tug at the world's central bankers. One view is that central banks haven't done enough to attack economic malaise. The other is that easy-money policies lack sufficient power to help economies and risk triggering runaway inflation or another financial bubble.

In August, tension over the two positions spilled into the open during the Fed's annual retreat in Jackson Hole, Wyo. Adam Posen, who recently finished a four-year term as a member of the Bank of England's monetary policy committee, chastised central bankers for their unwillingness to do more to stimulate their economies because of "self-imposed taboos."

Mr. Posen said central banks should give more help to such weakened markets as U.S. mortgages and European government bonds.

Athanasios Orphanides, another MIT professor who recently finished a term as the head of the central bank of Cyprus, took the opposing view. In the 1970s, he said, central banks sought to return unemployment to low levels of the 1960s. They made the mistake of keeping interest rates too low for too long, he said, yielding inflation instead of full employment. If banks repeat the mistake of overestimating their ability to push unemployment lower, he said, "disaster will follow on the price front."

Mr. Bean, meanwhile, said he worried that current low-interest-rate policies were losing their efficacy, an idea recently echoed by Mr. King. Low rates, he said, might induce less-than-expected business and consumer spending when governments and the private sector are burdened by too much debt.

"There is a lot we don't understand," said Donald Kohn, the Fed's former vice chairman.

Mr. Bernanke sat quietly during the discussion. But he and the other major central bankers were already primed to launch a new monetary onslaught.

A few days later, the ECB announced an agreement to buy bonds of struggling European governments in exchange for a country's adherence to fiscal austerity.

Then the Fed announced plans to buy bonds every month until U.S. job market improves "substantially." The BOJ, despite Mr. Shirakawa's hesitance, soon followed with news it also was expanding its bond-buying program.

Economists at the BIS, meanwhile, have grown more skeptical about the central bank tilt. They say their warnings of a credit bubble were ignored before the financial crisis. "Nobody took it seriously," said William White, formerly the top BIS economist.

Now, he said, the central banks may again be steering toward long-term troubles in their elusive quest for short-term growth.

 

Since we were already on the subject.

 

Life is Magnifique

Submitted by Roanman on Sat, 05/21/2011 - 07:45

 

 

You might have heard that International Monetary Fund President and likely 2012 Socialist Party candidate for the French Presidency, Dominique Strauss-Kahn was pulled out of his first class seat on an Air France flight from New York to Paris and indicted for the rape of a chambermaid in his $3000 a night suite at New York's Sofitel Hotel.

He wasn't indicted in the $3000 a night suite, the alleged rape took place in the $3000 a night suite.  I just wanted to make that point perfectly clear.

So anyway, I'm going to have to look into this Socialism stuff.

It seems to pay a hell of a lot better than I thought it did.

 

 

From each according to his ability, to each according to his need.

 

Who owns the Fed?

Submitted by Roanman on Tue, 04/26/2011 - 17:32

 

What a sordid adventure this has been.

A month or so ago I asked myself a question,

"Who owns the Fed?"

Foolishly thinking that having asked that question, at about 8:30 am on a Saturday morning, I'd have a post done by noon at the latest.

Just another example of just how wrong one can be, when one is wrong.

If you ask the above question of your search engine, it goes nuts.

I read a lot of it.

I'm a little mad at myself here because if you follow some of this stuff far enough, you get to part about the escaped, homosexual, occultist Nazis hiding underground (literally) somewhere in Argentina ....... with grey space aliens.

I am not making this up.

Hell, I couldn't make it up.

Anyway, what I'm mad about is that I lost that link.

You can believe me when I tell you I'm lookin' for it.

But I digress.

 

Evidently lots and lots of people have asked this question, long before I did and have posted/published their answers.

Then a whole other group read the first group's post/publication/book and felt a need to dispute those answers.

 

Now, wouldn't you think that it should be easy to determine the ownership of something as important as the entity the controls the money supply of the world's largest economy?

This is the information age after all, don't you think that a simple list might be easily obtainable?

It ain't.

Factcheck.org provides the best start here  .

I'll wait.

Click it and read it dagnabit, it'll only take a minute and I'm trying to make a point here.

Thank you.

Now, if you click on their sources, from the Fed itself, you get this , and then this .

 

DO IT!!!

You don't even have to read anything this time.

See what I mean?

Hmmmmm, is all I have to say about this.

 

Then there are the vids.

The vids now, are a whole new ballgame.

And while a lot of the vids are very good and entertaining, none of it is as helpful as I would have liked in answering the original question, "Who owns the Fed?" because one needs to have a much better than none at all understanding of the nature of money, before any of the above makes even one lick of sense.

So, here's where I start.

The following comes from a definite Libertarian point of view, and while some may prefer a different viewpoint, it is very clear and easy to grab hold of.

It'll take about 40 minutes but you will most likely be entertained and a hell of a lot smarter about the world around you than you are now.

Go get a beer, a glass of wine, a cup of coffee, maybe a sandwich.

 

 

 

Got all that?

I'll be back on issues having to do with that non existant list in a bit.

 

Maybe the Central Bankers really are running this thing

Submitted by Roanman on Mon, 04/18/2011 - 08:01

 

Thanks to our good friend David Michaels for sending us this thought provoking article from Ellen Brown.

As always, click on the photo to link up to the entire piece.

Our highest recommendation for bringing up a point we would have never thought up.

Ellen Brown also writes for Public Banking Blog

 

Libya all about oil, or central banking?

By Ellen Brown

Several writers have noted the odd fact that the Libyan rebels took time out from their rebellion in March to create their own centralbank - this before they even had a government. Robert Wenzel wrote in the Economic Policy Journal:

I have never before heard of a central bank being created in just a matter of weeks out of a popular uprising. This suggests we have a bit more than a rag tag bunch of rebels running around and that there are some pretty sophisticated influences.

 

 

 

Another provocative bit of data circulating on the Net is a 2007 "Democracy Now" interview of US General Wesley Clark (Ret). In it he says that about 10 days after September 11, 2001, he was told by a general that the decision had been made to go to war with Iraq. Clark was surprised and asked why. "I don't know!" was the response. "I guess they don't know what else to do!" Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran. 

What do these seven countries have in common? In the context of banking, one that sticks out is that none of them is listed among the 56 member banks of the Bank for International Settlements(BIS). That evidently puts them outside the long regulatory arm of the central bankers' central bank in Switzerland.
 
 
Just dwell on this one for a moment and I think you'll agree ...........
Whoa!!!!!
 
 
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