by Stephen Lendman
Published: Dec. 20, 2011 – SteveLendmanBlog
The late Georgetown University historian Carroll Quigley said in his book titled, “Tragedy and Hope:”
“(T)he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences.”
By controlling democratic and despotic governments as well as others in between, they’ve moved closer to absolute global control of money, credit and debt to dominate economies, politics, commerce, and imperial adventurism. As a result, they’ve benefitted handsomely at the expense of nations and popular interests.
Josiah Stamp, former Director of the Bank of England said:
“Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again.”
“However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money.”
Aesop said “We hang the petty thieves and appoint the great ones to public office.” Bankers with money power are the most pernicious of all.
Ellen Brown’s must-read book titled, “Web of Debt” discussed private banking, how it usurped money creation power, and how we can get it back.
She explained what growing numbers know about the malignant effects of its destructive power. Everyone should understand that the Fed isn’t federal. It’s a private banking cartel owned by its major bank members in 12 Fed districts. New York has controlling power through its majority interest.
As a result, the Fed rules globally with the European Central Bank, Bank of England, and Bank of Japan. They’re the world’s dominant central banks along with the Bank for International Settlements – the central bank for central bankers, or unaccountable banking boss of bosses.
In America, except for coins, banks create money called Federal Reserve notes, in violation of the Constitution under Article I, Section 8 that gives Congress sole power “To coin (create) money (and) regulate the value thereof….;”
Coins and paper money comprise less than 3 percent of America’s money supply. The rest is in computer entries for loans.
Banks create money that didn’t previously exist. Around 30% of it is for their private accounts – for speculation and other non-productive purposes.
A 1960s Chicago Fed booklet called Modern Money Mechanics explained how through “fractional reserve” banking, saying:
“(Banks) do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers’ transaction accounts.”
Money is created by “building up” deposits in the form of loans. They, in turn, become more deposits, not the reverse. The system goes back centuries based on the idea that paper receipts can be issued and loaned out repeatedly.
Under the gold standard, enough had to be held in reserve so depositors had access to their money. Today it’s run the presses, anything goes, and print it like confetti, even if currency debasement’s risked.
Fractional reserve banking literally creates money out of thin air. It’s then used to create multiples more.
Unlike previous times, today’s major banks are “giant betting machine(s).” Traditional banking is a lost art, at least at the mega-bank level. Most, or at least many, community ones operate responsibly.
Run recklessly, banking giants use multi-trillions for high-risk casino-type operations, through devices like derivatives and securitization scams.
Since Andrew Jackson’s presidency (1829 – 1837), the federal debt hasn’t been paid off, only interest to bankers and other owners of US obligations.
The 16th Amendment let Congress levy an income tax so bankers could be paid interest on federal debt. If America controlled its own money, it would be interest-free, and taxing people to pay it wouldn’t be necessary.
Early colonists did it. So did Lincoln. Why not now by returning money power to public hands where it belongs. Onerous taxes would be minimized or eliminated. Money for productive growth could be created inflation-free. Prosperity could be sustained. Full employment and social justice would be possible.
Imagine that America. Imagine the entire world that way, instead of one plagued booms, busts, inflation, deflation, instability, crisis, and perhaps the greatest ever Depression today bankers caused for their own self-interest to achieve greater consolidation, wealth and power.
In September 2010, a trader named Alessio Rastani on BBC said “governments don’t rule the world. Goldman Sachs rules the world.” As a result, “(t)he savings of millions of people are going to vanish.”
Warning viewers to prepare, he said the “economic crisis is like a cancer. If you just wait and wait thinking this will go away, just like a cancer it’s going to grow and it’s going to be too late.”
He added that most traders “don’t really care about having a fixed economy, having a fixed situation. Our job is to make money from” whatever goes on, up or down, good or bad. “Personally, I’ve been dreaming of this moment for three years. I go to bed every night and I dream of another recession.”
“When the market crashes….if you know what to do, if you have the right plan set up, you can make a lot of money from this.”
In 1929, rampant fraud caused the crash. In summer 2007, market scholar/analyst Jeremy Grantham warned of a “slow-motion train wreck” caused by “the first truly global bubble.”
Market manipulated speculation caused it. Money power in private hands gamed the system destructively.
Supposedly, the Fed was established to stabilize the economy, smooth out the business cycle, maintain healthy sustainable growth, create price stability, control inflation, and work for the betterment of everyone.
The 1978 Full Employment and Balanced Growth Act (called the Humphrey-Hawkins Full Employment Act) was enacted to fulfill the mandate of the Employment Act of 1946 by pursuing “maximum employment, production, purchasing power,” price stability, and balanced trade cooperatively with private enterprise.
It also required the Fed to pursue monetary policy for long-term sustainable growth with minimum inflation and stable prices. Specific goals included maximum unemployment of no more than 3% for persons aged 20 or over, not more than 4% for those aged 16 or over, and inflation not exceeding 4%.
In fact, a 1988 target of zero inflation was set. The law let Congress revise goals over time, but its purpose was to achieve sustainable, full employment low inflationary growth with Fed governors providing responsible monetary policy to help.
Instead, before and after Humphrey-Hawkins, they’ve been economic crashes, multiple recessions, instability, high inflation, soaring unemployment, the Great Depression, and today’s Greatest Depression expected to persist for years and leave incalculable human wreckage behind.
Fed policy also caused soaring consumer debt, record budget and current account deficits, an unprecedented national debt at exceeding 118% of GDP rising exponentially, high levels of personal bankruptcies and mortgage loan defaults, America’s manufacturing base offshored abroad, a secular declining economy, an unprecedented wealth disparity, over one third of US households impoverished, eroding social services, and a nation pursuing unbridled militarism helped by Fed complicity funding it.
A Final Comment
Clearly, money power in private hands failed. It’s wrecking the country, devastating the American dream, impoverishing millions, destroying jobs, contaminating the environment, and funding America’s military machine that’s ravaging the world one country at a time, and threatening humanity with extinction.
Job one should be stopping this monster from doing more harm, returning money power to public hands, using it responsibly to restore what decades of Fed policy destroyed, and hope it’s not already too late.
OWS and global protesters must grasp this as top goal to achieve others for long-denied social justice currently being lost entirely because corrupt politicians plan it with bankers.
Stephen Lendman lives in Chicago and can be reached at email@example.com.
Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.