One hundred years ago, on December 23, 1913, the United States created the Federal Reserve System (FRS) - a "private printing press" of a planetary scale for the production of money in unlimited quantities.
From time immemorial, the main means of settlements between people were precious metals, issued in the form of banknotes - coins or measured ingots. Lack of gold and silver has always been the cause of economic decline. The small money supply dictated the corresponding volume of production. On the contrary, when a large amount of precious metals entered the economy, everything flourished. They discovered America, galleons with gold and silver sailed to the Old World - an economic boom began.
True, not everywhere. In the 17th century, England, unlike Spain, did not yet have extensive colonies, so the island's state budget was in a permanent deficit. Meanwhile, wars - primarily with France - demanded colossal amounts of money.
The moneylenders came to the aid of the authorities. The Bank of England was established in 1694. Its co-founders were, on the one hand, private financiers, and on the other, the "crown". It was declared that banknotes were issued for the gold and silver in its vaults. And they can be exchanged for ringing metal at any time. Conveniently. Who will control exactly how much resources are in the bins? That is, you can print as many banknotes as you like.
The British do not hide the status of their emission center, all information that it is private can be found at www.bankofengland.co.uk. And how Great Britain, on the verge of a financial crisis, suddenly printed a lot of money, due to which it won the war with France and Spain, you can read in the books of the founder of geopolitics Rear Admiral Alfred Mahan.
Great Britain began to actively build an empire. The bank of the Bank of England began to replenish, the need to issue more obligations than the reserves were available disappeared. Nevertheless, a precedent arose, and with it financiers came to power. Baron Nathan Rothschild, Disraeli, Lord Beaconsfield are just people from the banking environment. But the patriarchal and very conservative English society with its strong influential aristocracy did not give the usurers the opportunity to develop in full force.
But in the United States, there was no aristocracy, a non-estate society promised excellent chances for establishing the power of money.
First Bank of the United States, Philadelphia, Pennsylvania.
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How was it in the USA?
The central bank of the United States - the Federal Reserve System (FRS) - was created much later than the central banks of other Western countries.
In the United States, structures that actually performed similar functions operated earlier. The first institution of this kind in 1791 was the First Bank of the United States. First Bank ("First Bank") was based in the temporary capital of the United States - Philadelphia and was created at the suggestion of the famous politician Alexander Hamilton, Alexander Hamilton, to solve the problem of the huge public debt formed as a result of the War of Independence and to create the national currency of the United States.
William Greider, author of Secrets of the Temple, a book on the history of the Federal Reserve System, notes that the very idea of creating such a body has caused a lot of controversy. For example, US Secretary of State Thomas Jefferson Thomas Jefferson believed that the formation of such an institution was contrary to the Constitution, since the state has no right to conduct business and, thus, violates traditional laws on property and free enterprise. Hamilton, in turn, considered this institution an effective tool for solving government problems.
First Bank had to work for 20 years, during which it was required to create a reliable financial system, a state gold reserve, ensure the stability of banking activities and issue the US national currency. First Bank was partly state-owned, but most of its assets were owned by individuals and companies. First Bank ceased operations in 1811 after Congress refused to renew its mandate. The main reason for this was the suspicion that the bank was acting primarily in the personal interests of shareholders, and not in the interests of the state.
However, the situation in the country has not improved. Alan Meltzer, author of A History of the Federal Reserve, stresses that at that time banking and lending activities were not regulated, many banks independently printed dollar bills, the quantity, quality and exchange rates of which no one monitored. in some areas of the United States there was a surplus of money, in others - a shortage, etc. The centralization of finances was obvious to many, but the Americans continued to feel prejudice towards such structures, believing that they were primarily intended to deceive the population and enrich those in power (the European experience of that time gave many reasons for such suspicions).
In 1816, the functions of the central bank were transferred to the Second Bank of the United States ("Second Bank"). This step was taken in the hope of somehow stabilizing the dollar. The Second Bank, like the First Bank, was created for 20 years and belonged mainly to private investors (the American state then suffered from chronic budget deficits) and was also an ultra-centralized institution. The then US President Andrew Jackson Andrew Jackson called this institution "the concentration of power in the hands of a small group of people who are not responsible to the people."
Second Bank has indeed become a scandalous undertaking. Bank Chairman William Jones William Jones, a close friend of President James Madison James Madison, focused on politics while neglecting financial stabilization. Jones issued "political" loans and did not demand repayment. The activities of the bank's branches were out of control, with the result that the entire US banking system was in a situation of utter chaos.
At the time, the United States was experiencing an economic boom. Europe, exhausted by the Napoleonic wars, was in dire need of American grain supplies. During this period, speculations related to the sale and purchase of land plots were strongly encouraged by the country's financial institutions. It got to the point that almost everyone could get a bank loan and start speculating in land. However, in 1818, the managers of the Second Bank realized that they had gone too far with loans and suddenly demanded a return from the borrowers. As a result, the volume of purchase and sale of land fell sharply. In turn, Europe, which restored agriculture, reduced the export of American grain. All of this was the cause of the Panic of 1819 - in fact, the first serious financial crisis in US history.
By 1836, after a 20-year term, the Second Bank ceased to exist, after which the era of complete banking freedom began - there was simply no organization in the United States that performed the functions of the Central Bank. Between 1862 and 1913, authorized private banks were in charge of public financial policy, and the US Congress tried to pass laws that often made matters worse.
Morgana private resort on Jekyll Island where the Fed organizers met.
The birthplace of the US Federal Reserve System was Jekyll Island, Georgia. In 1886, a group of millionaires bought the island and turned it into a closed club where it was fashionable to spend winters. In 1900, families rested on the island, in whose hands a sixth of the planet's money was concentrated - the Astors, Vanderbilts, Morgan, Pulitzers, Goulds and others.
It is significant that only people who were members of the club could get to Jekyll Island. The clubmen refused to admit to their resort a young British officer from the very noble family of Winston Churchill (future British Prime Minister) and the famous politician, future US President William McKinley William McKinley.
At the height of the popularity of Jekyll Island in the United States, a debate began on the creation of a centralized financial management system. This was due to four major financial crises that rocked the United States between 1873 and 1907. At that time, Americans were extremely negative about the very idea of creating a central bank. Similar structures in Europe acted ineffectively and even destructively. In addition, European central banks allowed governments to spend budget funds virtually unchecked.
A year after the 1907 crisis (it is generally believed that one of the "holidaymakers" John Morgan JPMorgan was its "organizer"), the US Congress created the National Monetary Commission, which was supposed to find out the cause of the instability of the US banking system.
Historian Don Allen Don Allen, author of Federal Reserve Directors: A Study of Corporate and Banking Influence, writes that in 1910 another group was formed, which included the leaders of the largest corporations and banks in the United States. … They met secretly on Jekyll Island, where they developed the concept of an organ that would become the Federal Reserve System. The name of the person who created the concept of the US central bank is even known - Paul Warburg Paul Warburg, a senior executive of Kuhn Bank, Loeb and Co, a member of the Rothschild clan.
Warburg came up with a simple plan. First, the central bank should not have been called a “central bank,” since Americans have a negative attitude to the transfer of financial management levers to one government agency. Second, the central bank should be controlled by Congress, but most of its governors should be appointed by private banks, which will also own its shares. Third, a system was proposed according to which not one, but as many as 12 federal banks were formed in the United States. Among other things, the reason was the desire not to create the impression that the central bank is controlled by the "sharks of Wall Street", or rather the financial kings of New York. They also took into account the significant size of the US territory and the presence of countless private banks that operated almost uncontrollably.
In 1912, the National Monetary Commission published a report recommending the establishment of a central bank in the United States. Edward Griffin Edward Griffin, author of The Creature from Jekyll Island: A second look at the Federal Reserve, notes that most of her recommendations were based on Warburg's ideas. In 1913, the US Congress passed the Owen-Glass Act, otherwise known as the Federal Reserve Act, which created the Federal Reserve System. The law was signed into law by President Woodrow Wilson Woodrow Wilson on December 23, 1913 and went into effect immediately. It is significant that the Federal Reserve Bank of New York - the city where the lion's share of the US capital was concentrated - received certain preferences.
Subsequently, other laws were adopted to regulate the activities of the FRS, for example, the Banking Act (1935), the Employment Act (1946), the Bank Holding Company Act (1956), the International Banking Act, International Banking Full Employment and Balanced Growth Act (1978), Depository Institutions Deregulation and Monetary Control Act (1980), Financial Institutions Reform and Recovery Act Financial Institutionsform, Recovery, and Enforcement Act (1989), Federal Deposit Insurance Corporation Improvement Act (1991), etc….
The Jekyll Island club closed in 1942. Five years later, the island was acquired by the state of Georgia. Now it is a tourist attraction - in one of the old hotels, two rooms, called the Federal Reserve, are still shown.
Fed structure
The Federal Reserve System is a paradoxical structure. Despite the fact that it is a state organization, de facto, its owners are private individuals.
The Fed consists of three parts: the Central Board of Governors in Washington, 12 Federal Reserve Banks scattered across the United States, and the Federal Open Market Committee. Federal banks
In a technical sense, each of the 12 Federal Reserve Banks is not a government organization, but a corporation (these banks are located in major cities - Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas -City, Dallas and San Francisco). Their shareholders are ordinary commercial banks. This system has existed since the formation of the Federal Reserve in 1913 and, as stated in the corresponding Federal Reserve Act, is designed to provide "the flexibility and power of the national financial system." All banks conducting operations throughout the United States were ordered to join the Fed, and local banks could do the same on their own initiative. This was done so that the central bank does not become an "ivory tower", in which only officials work, solving their personal problems,regardless of the real situation in the country.
In turn, this constantly gives rise to rumors that the US central bank is in the hands and under the de facto control of individuals with personal material interests (for example, this theory is proved by Murray Rothbard Murray Rothbard, author of The Case Against the Fed The Case Against the Fed). However, there are significant differences between commercial and federal reserve banks. The Federal Reserve Banks conduct transactions without profit. Commercial banks-shareholders, in contrast to ordinary shareholders, receive very insignificant dividends (no more than 6% per annum) from the activities of the federal reserve banks, and the state receives the main income. In fact, these dividends are payment for the use of financial assets of commercial banks. The fact is that US law providesthat banks are obliged to create reserve funds, which in most cases they keep precisely in the federal reserve banks, which, in turn, can use them in their operations. Commercial banks-shareholders also do not have the right to vote in decision-making by federal banks, their shares cannot be sold and used as collateral.
In 1982, the Court of Appeal considered a precedent case - a private person demanded from one of the Federal Reserve Banks for damages caused by the state. The court issued the following verdict: “The Federal Reserve Banks are not state structures, but independent corporations owned by individuals and controlled at the local level. The Federal Reserve Banks were created to fulfill a number of government tasks. Now, in the wake of the global financial crisis, the positions of politicians have again strengthened in the United States, who propose to abolish the private-state form of the FRS, turning it into a full-fledged state bank. In addition, it is proposed to reduce the autonomy of this structure by transferring it to the subordination of the Ministry of Finance. However, the matter has not yet reached real steps in this direction.
How many dollars does the Fed print
The program of "quantitative easing" of the economy "QE 1" (quantitative easing) was launched by the US Federal Reserve in the midst of the global financial crisis (November 2008) and continued until 2009. inclusive. QE 1 aimed to bail out large corporations, banks and private enterprises by buying out their depreciated debts. During the program, the Fed bought back mortgage and other bonds in the amount of 1.7 trillion. dollars.
"QE 2" was announced by the US Federal Reserve on November 2, 2010. and assumed the purchase of treasury bonds in the amount of 600 billion dollars within 8 months - 75 billion a month. In addition, the Fed had to reinvest about $ 300 billion from the first quantitative easing program (“QE 1”). As a result, the total volume of QE2 was supposed to be about $ 900 billion. Ended in June 2011.
September 13, 2012 The US Federal Reserve launched its third quantitative easing program (QE3). The printing press was turned on again, and the “printed” dollars were used to buy bonds. The program looks more modest than the previous ones - it was planned to buy back (print dollars) monthly mortgage bonds worth 40 billion dollars. Its duration was originally defined as “several quarters”, but no specific time frame was set. The Fed has repeatedly stressed that the main criterion will be the general state of the US economy - as soon as the Fed is convinced of its stable and high growth, QE3 should be curtailed.
Of course, this is not complete without CONSPIRACY THEORY
Republican Senator Nelson Aldrich, John Rockefeller's father-in-law, lobbied for the Federal Reserve Act in parliament. Unfortunately, the first time in 1912, he failed to push through the coveted document called the "Aldrich Plan". Subsequently, the reformers removed the name of the Republican Aldrich from the name of the annoying Democrats, made a number of minor changes to the document and re-launched it already as a Democratic initiative. Thus, after sophisticated manipulation of the banking circle in 1913, the Federal Reserve Act was successfully ratified. Interestingly, the vote in the upper house of Congress took place on December 23rd, and there were very few senators in the courtroom on Christmas Eve.
This is how the “Hydra Fed” was born, which performs the functions of the Central Bank with a small caveat. The Fed's form of capital is private - joint stock. The structure of this corporation consists of 12 Federal Reserve Banks and numerous private banks. The latter are shareholders of the Fed and receive a fixed 6% per annum in the form of dividends on their membership fees, regardless of the income of the Federal Reserve. Currently, about 38% of all banks and credit unions in the United States are involved in this structure (approximately 5.6 thousand legal entities). Federal Reserve shares do not give control rights, they cannot be sold or pledged. Moreover, their acquisition is the official duty of each member bank to invest in them an amount equal to 3% of their capital. The main benefit of being a member bank is borrowing from the Federal Reserve Banks.
No one knows which structures the US Federal Reserve actually belongs to. Only the close friendship and family ties of all the heads of the Fed with the Rothschilds and Rockefellers, as well as the history of the creation of the Fed, indicate them as the true owners. However, in the 70s of the last century, some information was leaked to the press through research journalist Rob Kirby, who released a list of organizations that owned the Fed. However, all these banks have long since disappeared through mergers or acquisitions with others. All but one - Bank of England (Bank of London).
Rothschild Bank of London
Warburg Bank of Hamburg
Rothschild Bank of Berlin
Lehman Brothers of New York
Lazard Brothers of Paris
Kuhn Loeb Bank of New York
Israel Moses Seif Banks of Italy
Goldman Sachs of New York
Warburg Bank of Amsterdam
Chase Manhattan Bank of New York
So, on the one hand, America's wealthy families have existed and thrived for centuries, on the other hand, through the Fed, they influence both the United States and other countries, because the dollar is still the main reserve currency.
In addition, if necessary, the US government can always borrow from the Fed, for example, $ 5 trillion for a small victorious war in the Middle East, if the interests of the parties coincide. Since Bush came to power, this measure has been used so often that today the national debt stands at a record $ 1.5 trillion. At the same time, it should be said that the debts of individuals and corporations in the United States amount to more than $ 10 trillion and the total amount of debt is approaching the volume of US GDP of $ 13 trillion.
Russia on the eve of the 1998 default was in softer conditions. Therefore, one of the biggest problems of the current crisis is the threat of a US default or hyperinflation of the dollar if the Fed starts printing paper with portraits of presidents at an accelerated pace.
“… Everyone, in general, understands that the reasons that led to the crisis in autumn 2008 have not gone away and that the second blow of the financial and economic elements is inevitable. At the same time, the state and corporations have significantly exhausted their free funds … There remains only one scenario - the state default. Designed and controlled dollar collapse ", - writes in one of the publications the head of the analytical group" Designing the Future "Sergei Pereslegin.
How the discharge will occur is anyone's guess. The world has changed significantly over the past 20 years. Back in the mid-1980s, the Americans managed to force Japan to strengthen the yen against the dollar, which was beneficial to the United States, but led to a depression in the Land of the Rising Sun. Today there is China, growing by leaps and bounds, with its own ideas of good and evil, and if you look more broadly - the BRIC countries (Brazil, Russia, India, China) - an invention of the Goldman and Saxon family.
China itself is ready to claim that the yuan will become the reserve currency in Asia, Russia is seeking to take over the financial systems of the CIS countries. At the same time, rumors about a new American currency are regularly circulating in the press. How many years has the United States been fighting the "golden dollar"? And on the doorstep is already bitcoin, and as it turned out recently, the FBI has the largest wallets in the world!
Are powerful families ready to share their power over the printing press with their neighbors? Most likely, general human principles for forecasts are not applicable here.
Fed secret programs
The first audit in the history of the FRS, conducted in 2012, showed that during and after the 2008 crisis, this private corporation secretly issued and distributed $ 16 trillion to “its” banks. Recipients included Goldman Sachs - 814 billion, Merrill Lynch - 2 trillion, City Group - 2.5 trillion, Morgan Stanley - 2 trillion, Bank of America - 1.3 trillion, The Royal Bank of Scotland and Deutsche Bank each received 500 bln. Noteworthy is the fact that among the recipients of financing there are also foreign banks, which is strictly prohibited by US law. In fact, this is a violation of all the rules, but simply counterfeiting.
Private investors in the Federal Reserve are releasing unrecorded dollars to pursue their own interests. And uncontrolled emission can lead not only to galloping inflation within the United States itself, but also to the dollar's loss of the status of the world reserve currency. However, the main danger for America is that the arbitrariness of the FRS, which distributes unsecured dollars to the right and to the left, makes the American state the debtor, which will be liable to creditors from China, Japan, Russia and the EU with all its property. In fact, the country no longer belongs to either the government or the people, since the US debt obligations have many times exceeded the size of the country's national wealth.
Why was Kennedy killed?
From the first day of the emergence of the Federal Reserve scheme (uncontrolled emission of the dollar), representatives of American society were aware of the danger of transferring this vital function of the state to the private banking cartel.
In 1923 C. Lindberg, a Republican from Minnesota, said literally the following: “The US financial system has been transferred to the hands of the Board of Directors of the Federal Reserve. It is a private corporation created solely for the purpose of extracting the maximum profit from the use of other people's money."
The chairman of the Banking Committee of the US Congress during the Great Depression L. McFadden criticized the FRS even more sharply: “One of the most corrupt organizations in the world has been created in this country. She let the people of the United States into the world and practically bankrupted the government. This is the result of the corrupt policy of the moneybags that control the Federal Reserve.”
Senator L. Bates adds: “The Federal Reserve is not part of the US government, but has more power than the President, Congress, and the courts combined. This organization determines what should be the profit of legal entities and individuals under the jurisdiction of the United States, manages domestic and international payments of the country, is the largest and only creditor to the government. And the borrower usually dances to the tune of the lender."
The "fathers" of American democracy also saw potential threats from the banking system. The author of the US Constitution, D. Madison, said: "History proves that money changers use any means of abuse, conspiracy, deception and violence in order to maintain control over the government, controlling the money flows and money emission of the country."
For many years, attacks on the Fed were not only ineffectual, but also dangerous. were the best way to ruin your career or end your life (why do you think President Kennedy was killed?). The first success was achieved only in 2012, when the US Congress on July 25, 327 votes in favor and 98 against, passed Ron Paul's bill to audit the Federal Reserve. The bill provides for a full audit of the FRS, including checking the compliance of the status of this institution with the American Constitution. This required a crisis that put the American state on the brink of survival.
Who Owns Dollars?
The American state has no money of its own. To acquire its "national currency", the US government issues bonds, the Fed prints banknotes and lends them to the government by purchasing its bonds. Further, the state buys back its bonds, and the money with interest is returned to the FRS. Thus, the main source of the Fed's income is seigniorage - the difference between the denomination of banknotes and the cost of manufacturing them. For example, if the cost of making a one-hundred-dollar bill is 10 cents, then the seigniorage for issuing such a piece of paper is $ 99 90 cents.
The Fed makes profits not only from the sale of dollar bills to the US government, but also from interest payments on Treasury bonds, income from payment transactions, deposits, and securities transactions.
Pursuant to the US Federal Reserve Act, the Fed is a government structure with private components, which includes: the US President's Board of Governors, the Federal Open Market Committee, 12 regional federal reserve banks, private banks receiving inalienable, fixed income shares of federal reserve banks in exchange for contributing reserve capital, a number of advisory tips. In reality, however, the government has very limited influence over the Fed for a number of reasons.
First, the FRS is a state within a state and is outside supervision (as, in fact, the entire banking system).
Second, the governors of the Fed are appointed for a period of 14 years with the right to renew their powers. As you know, the US President is elected for a term of 4 years, and the maximum term of his office is 8 years. As the saying goes, Presidents come and go, but the Fed's helmsmen stay. The previous head of the FRS A. Greenspan held the post for 19 years, and the current chairman B. Bernanke has been working since 2006, having outlived two Presidents.
Third, the Fed is the ultimate authority that can determine the authenticity of dollar bills. This provides not only the possibility of uncontrolled emission, but also allows any banknotes to be recognized as fake, even if they are actually issued by the US Federal Reserve itself.
And finally, the most interesting thing. The Federal Reserve prohibits the state from printing money and pursuing its own financial policies, independent of banks. American money belongs to the Fed. Therefore, power is concentrated here, and not in the White House.
