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Don't Cry For The Fed

Send It To Oblivion
By Wayne Jett © December 2, 2019

     Fake News is as much an ailment in America on topics of high finance as in political contests. According to Fake News and compromised academicians as well, the Federal Reserve is a bastion of respectability, good judgment and honesty on all matters relating to economics, monetary policy and – yes – even taxing and spending practices of Congress and the executive branch.

     Thanks to this false propaganda, many Americans are so misled that they remain unaware the Fed and each of its branch banks are privately owned and operated for the profit of international oligarchs. Only the Fed itself – not the 12 regional banks – has a meager fig-leaf of politically appointed board members hiding entirely selfish, anti-social motives.

Fed Independence and Secrecy

     The Fed’s anti-social motives remain hidden because the Fed insists upon complete independence – even freedom from audit of its financial operations. So we are not permitted to know what the Fed has done or is doing, either in America or elsewhere in the world, even with respect to creating and distributing its fiat currency. Nevertheless, one thing is reasonably certain: the Fed’s fiat currency called the Federal Reserve Note is not maintaining stable purchasing value.

     Most Americans remain ill-informed of the fatal flaw in the fiat currency we are forced by federal law to use in our businesses and personal affairs. Presently the Fed is permitted to issue printed “notes” masquerading as promissory notes obligating the Fed to deliver stated value upon demand by the bearer. But the “notes” actually contain no stated promise to deliver value, nor any stated amount of value, nor any stated date of delivery.

In candid terms, the Fed’s “note” is entirely illusory both in the sense that no actual promise is made (though it is implied and arguably may be reasonably inferred) and in the sense that the Fed does not own assets sufficient to re-pay values received in exchange for its “notes.” The Fed “note” has value only to the extent another party is willing to accept it as payment of a debt, based upon federal “legal tender” law and faith that yet another party will do the same.

The Fed Note’s Fatal Flaw

     As often discussed here, the fatal flaw in design of the Fed note is the absence of any express term requiring delivery to the bearer of the note (i.e., the person or firm which possesses and owns it) of anything having actual value equal to the value delivered in exchange for the note. Absent that mechanism, all value produced by users of the currency flows to the central authority which issued the currency (in this case, the Fed) rather than to those who produce to earn the value.

     Once value flows into possession of central authority, it is subject to pilferage and misappropriation by every pecuniary or political interest imaginable. This certainly is true in the instance of the Fed, since its operations and practices from the very outset to the present have been hidden from independent audit or supervision.

Treasury Pays Interest – Fed Does Not

     Now consider this basic incongruity in the financial relationship between the Fed and the U. S. Treasury. Treasury handles financial affairs for a major national government granted powers to tax, borrow and spend on behalf of its people for purposes of conducting government business. On general financial principles, this deserves a strong credit rating for borrowing instruments issued by Treasury.

     By contrast, the Federal Reserve was organized as a private corporation under federal law with limited capital contributed by private banks for shares of ownership. Initially the Fed’s primary financial instruments were called dollars issued under the name of the United States Treasury and were exchangeable for Treasury gold at a stated price of $20.67/oz. The dollar was devalued to $35/oz on January 31, 1934, when Americans were no longer permitted to exchange dollars for gold.

     Why must the U. S. Treasury pay interest to the Fed in order to borrow Fed “notes” when Treasury has and deserves a better credit rating than the Fed itself? Yet the Fed issues its “notes” in exchange for many assets (mortgages, Treasury securities, repurchase agreements, etc.) without paying interest while others hold them. The Fed enjoys that remarkable privilege only because Congress enabled it by granting the Fed’s “notes” statutory status as legal tender.

From Good Money To Fiat Currency

      The most profound change in the nature of money in America occurred in March, 1933, when President Franklin D. Roosevelt signed an executive order providing that Americans could no longer exchange their dollars for gold at any bank, nor were they permitted to own or possess gold coins. By that stroke of FDR’s pen, America’s good money became fiat currency with value which could be pilfered by the central bank.

      In August, 1971, President Richard Nixon announced the U. S. Treasury would no longer sell gold to anyone at a guaranteed price in dollars. The dollar’s purchasing power measured in gold dropped 75% within 18 months (from $35/oz to $140/oz). From 1971 to the present, the dollar’s decline in gold purchasing power has been 97.6% (although it was lower previously). Many observers believe the gold price is suppressed by using contractual derivatives pricing where delivery of gold is not guaranteed.

Interest-Free Currency From U. S. Treasury

      Some opponents of the Federal Reserve’s fiat currency simultaneously oppose the gold standard approach to placing real value in the pockets of workers and producers. They suggest that the best solution (to 4:47) is for the U.  S. Treasury to issue its own paper currency for use interest-free to pay all costs of federal government operations. Since a major portion of federal debt presently is interest on Treasury securities, future increases in federal debt would be reduced by the amount of interest saved.

      This long-standing proposal for the U. S. Treasury to issue interest-free currency for payment of U. S. government expenses is beset by major concerns. First and foremost, the proposal would produce another fiat currency (not real money) with no mechanism for putting actual value into the possession of persons who earned it. So the Treasury-issued currency would gradually steal the value produced by the people and wind up being worthless paper, as all fiat currencies do.

      Second, this new fiat currency would be targeted for destruction by the Rothschild cabal which presently owns and controls the Federal Reserve. The cabal would have little difficulty attacking and destroying the Treasury currency on foreign exchange markets. This has occurred whenever any nation has attempted to issue a fiat currency without placing the cabal in control.

      Third, issuing currency without interest to the U. S. government would invite even more profligate federal spending than already exists, increasing the public debt more sharply. Making matters worse, the government’s favored role with interest-free financing would federalize ever greater portions of the national economy, pushing out state, local and private competition in every activity requiring significant financing.

Don’t Cry For The Federal Reserve

      Dealing with ending the Federal Reserve and returning to an economic system characterized by sound money and absence of an overpowering financial cabal is worrisome and a major challenge, no doubt. But doing nothing while the cabal proceeds with its end-game of taking the Fed note to zero, collapsing national economies and proceeding with their global dictatorship scenario is much less attractive.

      We must proceed towards a resolution which is compatible with our objectives to be free, prosperous, honorable and moral people. Most fortunately, by God’s providence and blessings, we have a pathway opened for us to proceed towards these goals. But to succeed we are called upon to understand and to act.

      Juan and Evita Peron were players on the world stage in fascist/nazi infiltrated post-WWII Argentina until Evita’s death in 1952 and Juan’s 20 plus years later. When injuries done to humanity are measured, however, the Perons’ deeds will almost assuredly pale nearly to insignificance compared to the Federal Reserve Bank of New York, its subordinate regional banks, Board and Federal Open Market Committee.

      The Perons are mentioned here to make clear the appropriate place in history to be occupied by the Federal Reserve upon its demise. By no means should Americans or others in the world be concerned now that someday they will cry for their loss of the Fed. We have the prospects of conquering these oppressors and of going forward free from the cruel financial power over our governments and ourselves that has bedeviled the world during the past 106 years.

     As with fascism, communism, socialism and every other ideological cage designed to enslave humanity, the privately owned and secretly operated central bank known as the Federal Reserve should be assigned to the dustbin of history at the earliest possible date with no trace of regret.