- The Lie: The Federal Reserve System is a government operation that exists to protect the public by stabilizing the economy. Most people have no idea what theMessage 1 of 1 , May 18, 2011View Source
The Lie: "The Federal Reserve System is a government operation that exists to protect the public by stabilizing the economy."
Most people have no idea what the Federal Reserve System really is, nor how adversely their daily lives are affected by it. Only the barest facts about the subject are cited here, the reader being invited to verify their authenticity via the footnoted reference. Accordingly, the facts are these.
1. The Federal Reserve System is not a government operation at all. It is, rather, a banking cartel that exists only to enhance the profits and market stability of the cartel's members. It is, however, in partnership with the government cartel.
2. There are no reserves anywhere in the Fed.
3. The Fed is not a system in the sense in which it was intended by the Congressional act that created it. The Congressional intent was to diffuse the concentration of financial power of the biggest banks and investment firms in New York. Instead the Fed protects the financial interests of those firms and guarantees the stability of their shared monopoly.
4. The Fed does nothing to stabilize the economy. If anything it consistently damages the economy by creating more and more money out of nothing. As a result the economy has proven less stable than it was before the creation of the Fed.
5. A further result is the steady erosion of the buying power of the dollar which results in the appearance of rising prices. We call this phenomenon "inflation". While we are told that the Fed protects us from inflation, the fact is that the Fed is the primary cause of inflation.
6. About every ten years the value (buying power) of our money is cut in half by inflation. But our loss of buying power is precisely equal to the Fed's gain that results from its practice of printing money for the Government to spend. This is why the Government permits the Fed to create money out of nothing. Quite literally, the government steals our buying power by borrowing such fiat money from the Fed. Besides losing our buying power, we also wind up paying the interest that the government owes the Fed as a result of this bogus practice.
7. It is therefore accurate to say that inflation is a tax that permits the government to raise any amount of money it wants at any time without asking permission of the public. We and our children pay the inevitable bill.
8. Under regulation by the Fed, commercial banks were at one time permitted to only lend out to the public 90% of the deposits on hand, thus ensuring that there was always at least 10% of deposits on reserve for depositors who demanded their cash. Today the rules have changed. If your commercial bank has $100 in deposits, it is permitted to lend out $900 that it never received in deposits. The pretense is that your $100 is 10% of $1,000, so the bank may lend the difference: $900. As a result of this practice the vast majority of commercial bank loans to the public are made with money that is as unreal as that which the government spends.
So when you buy a house for $100,000 dollars, put 20% down, and take out a 30-year mortgage at 10% interest, you wind up paying over $170,000 in interest to the bank Under these conditions the bank makes a profit of about two and one half times what the builder receives (about $70,000) for providing all the labor and materials that went into the house.
9. What is more, if you fail to make your payments, as sometimes happens, the bank gets your house. Why? Because it put up the money for the purchase, but
10. The bank didn't do this with its own money, nor even with its depositors money. It created the money out of nothing with a few keystrokes on a computer. This cost it nothing and therefore represented no risk whatever.
11. This example of the $100,000 house is, as Ed Griffin puts it, "like a grain of sand in the Sahara". To truly understand what the Fed is doing to the public you have to multiply this effect by "every house in America, by every hotel, by every high-rise office building, by every factory, every jet airplane, every warehouse full of goods, every farm building, all the factory and farm machinery." The result is an almost unimaginable river of unearned wealth flowing into the hands of the banking cartel. The numbers are so vast as to be incomprehensible. And all of this takes place at the expense of the taxpayers, who don't even know they are being taxed.
12. On the government side of the partnership, the government is able to tax the public in any amount at any time without even telling the public that it is being taxed. On the banking side of the partnership the commercial banks affiliated with the Fed are able to collect perpetual interest on money created out of nothing, with no risk or cost to the "lender". The entire scheme is a gigantic scam, and the public is the loser.
13. As ugly as these facts are, the problem doesn't end there. Where is all that money going? Is it accumulating somewhere?
No. The owners of the Fed cartel have more money than they could spend in a hundred lifetimes, no matter how luxurious their lifestyles. When people have control of that kind of wealth they usually spend large portions of it to acquire power over others. They do this by buying up influence and control over the institutions that are the centers of influence in our daily lives. To do this they buy up politicians, political parties, radio and television networks, cable networks, publishing houses, universities, church organizations, newspapers, magazines, non-profit foundations, multinational corporations, and entire foreign governments.
So the upshot of the Fed's duplicity is that the owners of the controlling shares of the world's biggest banks, and their colleagues, who own control of similar central banks in other countries, are steadily taking control of the world. It is this group who control such institutions as the United Nations, the World Bank, the International Monetary Fund, and the Council on Foreign Relations.
 For a thorough account of the Fed, its origin, purposes, and functioning the reader is referred to The Creature from Jekyll Island by G. Edward Griffin, American Media, 2004. An excellent 75-minute lecture summarizing the book can be downloaded free at www.realityzone.com.
 The Federal Reserve Act of 1913.