It’s the stuff conspiracy theories are made of, but the fact is, twelve people overwhelmingly control the United States economy and they are not elected or appointed by the government. They are known as the Federal Reserve System and may be to blame for the downfall of the American economy.
In 1993, The Head of the House Banking Committee, Representative Henry Gonzalez of Texas, called for an independent audit of the Federal Reserve System’s operations. The Federal Reserve System controls the nation’s money and inflation rates and is backed by the Central Government. It is directed by private board members of which Allen Greenspan is the most notable. “The Federal Reserve System virtually controls the nation’s monetary system, yet it is accountable to no one. It has no budget, it is subject to no audit, and Congressional Committee knows of, or can truly supervise its operations,” said former economist Murray N. Rothbard. The committee meets privately to make decisions about the nation’s money and there is no media coverage of the meetings and only vague presentations on the status of the United States economy and what the FRS is doing to secure people’s current and future investments. Lew Rockwell, the President of Mises Institute, an organization fighting to change the country back to Gold Standards, says there’s a reason the meetings are private and it’s because the twelve committee members can’t tell the truth about what they know. “If they told the truth there would be a revolution and a bunch of Americans would be ready to toss them out of the building,” Rockwell says in the documentary “Money, Banking and the Federal Reserve,” which can be viewed on-line. In November 1993, Gonzalez pushed for legislation that would not only audit the Federal Reserve System, but also make its meetings open to the public and televised and require the President to appoint its twelve members.
Unfortunately, President Bill Clinton turned down the legislation because he claimed it would “run the risk of undermining market confidence in the Fed.” And, market confidence is what this fact comes down to and one of the most potentially disastrous situations facing the United States.
To understand how America manages its money and why a group of twelve people are controlling more than 350 million people’s economical futures in secrecy and widening the gap between the rich and poor, a little history lesson is at-hand. In the early days of the United States, the government used Fractional Reserve Banking methods, which allows more money to be issued than actually exists based on selling notes for interest. In 1791 when Alexander Hamilton was the first Treasury Secretary he set up the first Bank of the United States in order to supply money for the government and banks throughout the United States, providing more power to the government. Hamilton was for Big Government, which a central banking system strengthens more so than an economy backed by real gold. However, Thomas Jefferson, and more importantly, Andrew Jackson apposed the concept believing every bank, and the government, should have enough gold to back their customer’s or business accounts. Jefferson helped bring down the first central banking system believing it benefited banks in New England and was undemocratic.
In 1816, powerful men again attempted to create the system but Jackson, as President, stated the concept “benefited a few at the expense of many.” Jackson believed the central banking system could be inflated to permit government expenditures to skyrocket while decreasing the value of American’s money. He reinstated what is known as the Gold Standard, meaning, all money had to be backed by actual gold.
However, like so many times in the future, war came to the rescue of the central banking system. In 1862, the Civil War forced President Abraham Lincoln to abolish Gold Standards in order to abolish slavery. “Every large war has involved a departure from the Gold Standard because the Gold Standard puts tough restrictions on the government,” Rockwell states in the documentary. Lincoln started printing paper money to finance the Civil War, made it legal for all transactions but not redeemable by gold. Essentially, people were forced to accept the paper money at its worth based on the government being strong enough to back it, which became the pillar of our modern Federal Reserve System.
After the war in 1879, the Gold Standard was put back in place and the greatest era of growth took place in the United States, increasing by four percent each year for 20 years straight. Economists believed this success came about because the government had no way of manipulating the economy which created higher labor productivity, legitimate savings and more confidence in investing, among other benefits. However, this is the point in history, around 1887, when the gap between rich and poor began to widen based the power of wealthy men and their “relationships” with members of the government. It would be JP Morgan and John D. Rockefeller, along with a group of other wealthy men that would use their financial powers to once again bring back central banking. Rockwell states the two men favored central banking because it allowed them cheap credit and an inflated money supply to finance the expansion of their businesses empires. Together Morgan and Rockefeller led the campaign to sell the idea to the American public and the government granted it.
However, in 1907, alarm over fractional reserves in US banks led to a crisis in New York City when people were unable to withdrawal their cash because it didn’t exist. The only thing that saved the United States from complete bankruptcy was a loan from JP Morgan himself. It almost seems as if the richest of the rich had the upper hand at this point in history and finally, the Federal Reserve System as we know it was created at Jeckle Island, Georgia by a mere six men, including Morgan and Rockefeller representatives. The Assistant Treasury Director for the government was also present. Rockewell said the concepts created in 1910 allowed the Federal Reserve to be the “lender of the last result.” “If banks failed, they’d get the money from the government,” he said.
In 1913, Woodrow Wilson and his Big Government philosophy supported and passed the Federal Reserve Act. This allowed the President to complete projects without actually having the money to fully back them. It established a system to oversee monetary policy and regulate the commercial banks, although it was simply a fake security blanket created for the public’s eye. At this time, the Gold Standard was still in place, but once again, war changed everything. During World War I, the government went from borrowing $1 billion to $27 billion creating sharp inflation and leading to interest rates doubling and a huge national debt. In 1921, the market seemed to recover due to new technology such as cars and appliances, but behind the scenes, the Federal Reserve System was distorting what was taking place with inflation while massively profiting from the Roaring 20’s. In October of 1929 the Stock Market lost one-third of its value leaving $7 billion in bank failures, based on Federal Reserve System procedures. People simply went to the bank to get their money, but there was nothing left. “They watched it disappear into thin air,” says Joseph Salerno, an economist from UCLA.
As everyone knows, the Great Depression was ultimately saved by World War II, even after President Franklin Roosevelt implemented his New Deal and promised an end to poverty, which failed. With WWII bumping up the economy of the United States, the Federal Deposit Insurance Corporation (FDIC) was also created by the Feds to ensure the Great Depression would never happen again. To this day, the FDIC guarantees checking and savings deposits in member banks up to $100,000 per depositor, but no more. A sad fact of this whole story is the FDIC only holds half of one percent of what the public holds. In 1933, Roosevelt ended Gold Standards for good and basically confiscated all the gold banks had.
To this day, no United States Federal Budget has been balanced since the Gold Standard was abandoned and banks hold only 10 percent of all manned deposits. The remaining 90 percent does not exist.
Today, the United States is like an uneducated teenager that gets a credit card with no financial limits but that has no realization they will one day be responsible for paying it back. When it comes time to pay the money back, they will have to choose bankruptcy because it will be too overwhelming. If this were to occur in the United States, your money, my money and everyone without gold or valued possessions would be in poverty. In 1993, Gonzalez confirmed that the Fed did have tapes and transcripts of the meetings which could have been made available to the public, but found they had misrepresented the existence of the transcripts and chose to ignore questions from Congress. After the existence of the transcripts was revealed, the Fed agreed to release the transcripts on a five-year time lag. The time period has been extended, so that for example 1992's transcripts were not released until 1998. Gonzalez has not been the only patriot to oppose the Federal Reserve System. Congressman Ron Paul also believes the United States needs to have Gold Standards back in place in order to narrow the gap between rich and poor and create future prosperity and faith that ‘real’ money invested now will still be there when it’s needed. “The average American family would benefit greatly from a Gold Standard. There would be more jobs - better, secure jobs, more business opportunities, savings would be secure and not be stolen by a central bank and central government,” Rockwell states. Rockwell said the only groups the Federal Reserve Benefits are the government, big banks, government contractors and ultimately, lobbyist. Who does it hurt? You and I.
Rockwell admits changing back to the Gold Standard would not be an easy process, but the alternative of keeping the Federal Reserve System is unfathomable. “Sound money (backed by gold) means economic prosperity and limited government. Unsound (not backed by gold) means, recessions, depressions and big government,” he states. Salerno says every single, individual bank should be in charge of its own debts and contractual obligations, backed by gold and available, in full, to all individuals at any moment they want it. Banishing the Federal Reserve System seems to be one hope for the future of America and a direct hit at the elite society ruining and ruling the lives of so many. Write your congressman and demand the FRS be banished and the Gold Standard be put back in place, if not for yourself, for the future.