“The economic scheme in the U.S. of
creating fiat book-entry money via T-securities in the amount of the principal
of the security with a promise to repay the principal PLUS the interest (i.e.,
deficit spending) is impossible. The interest is never created.
The debt must continually be
increased to pay interest on earlier securities or the scheme will collapse.”
The interest-based fiat financial
system is founded on fraud. The money printed, and all its derivatives, are
sold as commodities of value, when in reality are intrinsically worthless
except for the ink and paper they are printed on.
The amount they are supposed to
represent is plucked from thin air and has no bearing at all with tangible
economics. But even so, the bearer can only earn fiat money, or the borrower
thereof will be able to pay that imaginary debt only, through the sweat of his
eyebrow. That’s when the fraud happens.
Their value resides only from the
imagination of the bearer, i.e. presumption of value, and his faith on the
entire system run by priests of various types, the object of priesthood
indoctrination and worship known as college education.
The word “college” comes from the
Vatican’s College of Cardinals, the group tasks of electing the Pope, a product
of Saturnilian worship. The Pope himself is the CEO of the Mother of All
Corporations which includes most governments on Earth.
Through our article, Aside from Vanguard, Nazionists also
have Genie Energy [GNE], we publicly asked Ben Fulford, for
the sake of transparency, about the concrete actions being taken against the
Cabal considering that the likes of Dick Cheney are still moving around as free
men, in spite of the indictment and guilty verdict rendered through the
Malaysian Court hearing the case against the Bush-Cheney illegal “War of
Terror”..
We asked the question because we are
all stakeholders of the future of this planet, and once a group starts to claim
proactive actions are being done against the enemies of humanity, we need at
least know the general story.
We have been ripped off before, my
country and yours and we don’t want to be ripped off again and again.
We got a response from Ben, like so:
“The main source of Khazarian mob
power, the Federal Reserve Board, has had its US operations seized by the
Pentagon. Now the Fed has been sued for trillions of dollars’ worth of fraud by
a Fed whistleblower in an effort to recover US government money stolen by this
criminal institution.
…
Those readers still wondering when
all the arrests of Khazarian gangsters would start need to understand by now
the process is well under way, even if painfully slow. We have already seen
kings and popes resign in Europe and now we are seeing the American Khazarian
mob rulers being taken down. This process will continue until it is complete.
However, we must not underestimate
the power of the Khazarian mob or their continued confidence in their ability
to control the future of this planet.“
As indicated above, Ben referred us
to a case filed against the Federal Reserve, the supporting document of which
is posted below.
Our concern at this point is: Will a
complaint filed against a corporate entity like Federal Reserve Bank prospers
inside another corporate entity, i.e. a corporate court?
Once the bearer awakens to the whole
charade, his faith of the entire system collapses. That’s when he’ll know what
freedom truly is.
This is where non-ninjas like us need
to come in. So, feel free to disseminate all information we have shared through
this website.
Definitions:
- FRBNY = Federal Reserve Bank of New York
- BOG
= Board of Governors
RIP-OFF BY THE FEDERAL RESERVE
Revised April 2012
SUMMARY: This mathematical analysis shows how:
1 - The economic scheme in the U.S. of creating fiat
book-entry money via T-securities in the amount of the principal of the
security with a promise to repay the principal PLUS the interest (i.e., deficit
spending) is impossible. The interest is never created. The debt must
continually be increased to pay interest on earlier securities or the scheme
will collapse.
2 - The National Debt can never be paid off. Contracts that cannot be culminated are acts of fraud and are void from their inception.
3 - The funds from all Treasury security auctions are received on the accounts of the FRBNY; records of disbursements are not disclosed or audited.
4 - Congress has temporary benefit of deficit spending (a $1.4 trillion ‘loan’ for 2010) until maturity of the securities (the collateral). The collateral is never redeemed; it is sold at auction and the money is retained by the Fed. Read: Lawsuit Filed vs. US Banks Rigging $12.8 Trillion Market
5 - The BOG owners receives the value of all national debt as purloined profit mingled with funds for redeeming mature market securities. The money from the sale of collateral is expensed (not considered profit) to reduce net earnings of the Fed to zero.
6 - The operation is, as with any Ponzi scheme, predestined for inherent national bankruptcy when buyers of the increasing debt lose faith that profit will be generated greater than inflation. Commerce, the engine of the economy, will cease to function from uncertainty. Reduced tax revenue will cause even greater National Debt. Read–hyperinflation with high interest rates.
7 - Future debt will exceed the entire worth of the nation. Holders of debt will sell securities below par as interest rates rise. Redeeming is handled by the Fed which will purchase national heirlooms and assets at fire-sale prices as in Greece. Ownership of infrastructure and assets will be obtained by owners of the BOG. (or Wall Street fronts).
8 - The touted concept that the public directly funds deficit spending is an illusion. Such funding, such as is used to roll over previous debt, can never produce inflation nor increase the National debt.
9 - The law provides that profit from the Fed belongs to the government. Concealment of funds due the government violates several federal criminal laws.
10 - The BOG appears to be a government
contractor rather than an agency.
The economic scheme in the
U.S. of creating fiat book-entry money via T-securities in the amount of the
principal of the security with a promise to repay the principal PLUS the
interest (i.e., deficit spending) is impossible. The interest is never created.
The debt must continually be increased to pay interest on earlier securities or
the scheme will collapse.
The National Debt can never
be paid off. Contracts that cannot be culminated are acts of fraud and are void
from their inception.
The funds from all Treasury security auctions are received on the accounts of the FRBNY; records of disbursements are not disclosed or audited.
Congress has temporary benefit of deficit spending (a $1.4 trillion ‘loan’ for 2010) until maturity of the securities (the collateral). The collateral is never redeemed; it is sold at auction and the money is retained by the Fed. Read: Lawsuit Filed vs. US Banks Rigging $12.8 Trillion Market
The BOG owners receives the value of all national debt as purloined profit mingled with funds for redeeming mature market securities. The money from the sale of collateral is expensed (not considered profit) to reduce net earnings of the Fed to zero.
The operation is, as with any Ponzi scheme, predestined for inherent national bankruptcy when buyers of the increasing debt lose faith that profit will be generated greater than inflation. Commerce, the engine of the economy, will cease to function from uncertainty. Reduced tax revenue will cause even greater National Debt. Read–hyperinflation with high interest rates.
Future debt will exceed the entire worth of the nation. Holders of debt will sell securities below par as interest rates rise. Redeeming is handled by the Fed which will purchase national heirlooms and assets at fire-sale prices as in Greece. Ownership of infrastructure and assets will be obtained by owners of the BOG. (or Wall Street fronts).
The touted concept that the public directly funds deficit spending is an illusion. Such funding, such as is used to roll over previous debt, can never produce inflation nor increase the National debt.
The law provides that profit from the Fed belongs to the government. Concealment of funds due the government violates several federal criminal laws.
The BOG appears to be a government contractor rather than an agency.
*********************************
The Federal Reserve uses euphemistic
smoke and mirrors to obscure their scam. The appearance of the scheme is that
Congress receives the benefit of inflation. In reality, it is the Fed that
receives the purchasing power from inflation—without public awareness or
documentation. With full knowledge the following is not the way the Fed or the
government describes the system, allow me to offer a different analysis of
their operation.
CREATING BOOK-ENTRY (FIAT) MONEY
Congress can pay for federal expenses
with funds collected from taxes, but Congress is never satisfied with this
amount. The desire to buy votes/campaign contributions from special interest
groups induces congress-critters to spend more, and this is identified as
deficit spending. To create this make-believe money requires the assistance of
the Federal Reserve.
Congress will give the Fed a
T-security (bill, bond, or note) and the Fed will accept the document as an
asset of one of the twelve FR Banks. The Fed will then establish a line of
credit for the U.S. government (a book entry) in the same amount and list the
liability as Federal Reserve Notes. Voila !! Fiat money has just been created
for Congress to spend. Ref: 2009 Annual Report to Congress by the Board of
Governors, page 448 (for account identification only).http://www.federalreserve.gov/boarddocs/rptcongress/annual09/pdf/ar09.pdf
The
accumulated securities that have been authorized by Congress add up to the
national debt.
If the Fed retained all of the
securities (assets), the inflationary pressure created by the extended
line-of-credit for Congress would be too obvious. Also, Congress complained
several years ago the interest collected was too much profit. The Fed has been
forced to return excess profit to the government. The Fed therefore wants to
sell a major portion of the securities so it has arranged with the Treasury
department to act as auctioneer for selling to the Primary Dealers. This
immediately sells the assets of the Fed.
[FN: The Fed recently obtained $700
billion bailout funds. Secretary Paulson begged Congress, on actual bended
knee, to give the Fed money and Congress gave them $700 billion in securities.
The Fed then swapped the securities to GSE (Freddie and Fannie)/international
bankers for toxic MBS‘s—and rescued Paulson’s $800 million in Goldman stock by
bailing out AIG. ]
[FN: The 2009 Annual Report lists Assets of
$776 billion securities and $908 billion Government Sponsored Enterprise
Mortgage Backed securities out of $2.2 trillion total assets. Whether the
bailout money, given in large part to international bankers for toxic assets,
was a quid pro quo with the PD to avoid lawsuits for fraud is beyond the scope
of this writing. The International Bankers do not lightly suffer transgression.
The continued mutual benefit of programs, paid for by taxpayers, should
evidence Wall Street and the Fed/international bankers constitutes a symbiotic
relation (or a common ownership).]
The value of any securities not sold
by the Fed is still in circulation and becomes the Reserves for commercial
banks. Commercial banks, as an aggregate, have no other source of reserves. All
money in circulation is originated from T-securities. The reserves, derived
from Treasury checks deposited throughout the world, are then multiplied via
loans by commercial banks utilizing the fractional reserve practice. (The
System Open Market Committee (SOMC) selling and buying of securities alters the
reserves—with high leverage—but this effect is applicable only to securities
that are already in the public domain.) The Fed currently holds a mere $750
billion of $12.5 trillion issued securities. Ref.http://www.fms.treas.gov/bulletin/b2009_3.pdf. Chart
OFS-1.
Observe that the amount of money
created by the security is the amount of the principal but the amount promised
to be repaid is the principal AND the interest. The interest is never created
but payment is required by the agreement. It is impossible. The linear
expansion of base/reserve money via fractional reserves by creating commercial
loans does not change this. If, hypothetically, all money in circulation was
used to pay off the securities issued by Congress, all bank reserves would be
wiped out and the commercial loans would collapse—and every dollar of interest
on the national debt accumulated from day one would still be due—but there
would be no money outside of the Fed’s vaults to pay it.
The debt created by usury based
sovereign debt is perpetual; it can never be paid off. The contract cannot be
culminated. Any contract that cannot be culminated is an act of fraud. A contract
based upon fraud is invalid upon its inception. It would appear the national
debt is not legally enforceable. (A debt incurred by a state or municipality is
not a sovereign debt as used in this analysis. Such a debt is akin to a
commercial loan and is completely repayable—but may be evidence of unwise
administration and result in default.)
There are esteemed economists who
contend the fractional reserve multiplier is a major cause of inflation. The
concept is questionable. Assuming the amount of base money and the multiplier
factor remain constant, the creation of fractional reserve money reaches a
ceiling that cannot be exceeded until more base money (from T-security issues)
is added. The multiplier factor is a mere linear increase of the base money. A
major tool of the Fed is to alter the base money with SOMC transactions to
boost or quench transient situations. Once the ceiling is reached, only
congressional deficit spending can create new money in circulation.
In medieval times, the gold-guilds
would inflate the illusion of a commodity with paper gold-certificates. Today,
the fractional reserve multiplier increases the image of an image of value;
i.e., it increases itself. The basis of value is from the Treasury security.
SOMC operations and multiplier factor
alterations change the amount of FRN’s in circulation—a debt obligation (IOU)
of the Fed. Only congressional deficit spending changes the debt obligation
imposed on the citizens. However, if the multiplier factor is reduced to zero
and banks are permitted to issue currency without limit, it would produce an
inflationary bubble of FR debt just as the housing scam produced a bubble of
mortgage debt.
A little-appreciated concept that a
FR bank can create money/debt on their own account in the same manner as a
commercial bank making a fractional reserve loan appears to be rarely utilized.
Any requirement that a FR bank must have reserves is unknown, the lack of which
would allow an infinite expansion of money. This option may be the origin of
the $7.7 trillion recently discovered by Bloomberg that was created to rescue
the TBTF banks.
THE INESCAPABLE WHIRLPOOL OF PERPETUAL,
ESCALATING NATIONAL DEBT
There is more skullduggery involved.
Let us assume a newly established sovereign nation is setting up a usury based
economy and will issue 100 unit securities, a five year maturity, and an annual
interest rate of 20 percent over a span of five years. A high rate of interest
and short maturity is used to reduce repetitive calculations. The
identifications of Congress and the Fed will be used to convey the images.
Upon the issuance of the first
security, Congress has 100 units to spend. At the end of the year,
Congress/Treasury has to pay 20 units to the Fed for interest. If the nation
had to pay off the security at the end of the first year, the bankruptcy is obvious.
There have never been 120 units created. Twenty units could be removed from
society but that would leave only 80 units in circulation, cause great
financial hardships, and still leave an impossible obligation to redeem a 100
unit security. The solution is to put off the interest payment until the next
issue of security for the second year. The interest is paid from the principal
created by the second issue.
During the second year there are 200
units in circulation but the actual rate of interest on the second issue is not
20 percent. Since 20 units had to be paid to the security holders, congress
only received 180 units to spend (100 + 80) but they are committed to pay 40
units of interest on the security at the end of the second year. The interest
rate of 40 divided by 180 is 22.2 percent. Considering the second year alone,
the interest is 20 divided by 80 or 25 percent.
When the security for the third year
is issued, the interest of 40 units for the first two years securities will not
be available for congress. Congress will receive only 60 units for public
projects but will have to pay 20 units interest at the end of the year. The 240
units received by congress (100 + 80 + 60) will require 60 units of interest at
the end of the third year. The cumulative interest rate (60 divided by 240) is
25 percent. The interest rate for the third year alone (20 divided by 60) is
33.3 percent.
At the start of the fourth year, the
security will have to cover the interest charge for the three prior years of 60
units. Congress will receive 40 units for government spending. The 280 units
received by congress (100 + 80 + 60 + 40) will demand 80 units of interest at
the end of the fourth year. The cumulative interest rate (80 divided by 280) is
28.5 percent. The interest rate for the fourth year alone (20 divided by 40) is
50 percent.
The security issued for the fifth
year will pay the 80-unit interest for the prior four years. Congress will have
20 units to splurge. The 300 units received by congress (100 + 80 + 60 + 40 +
20) will require 100 units of interest at the end of the fifth year. The
cumulative interest rate (100 divided by 300) is 33.3 percent. The interest
rate for the fifth year alone (20 units received–20 units in interest) is 100
percent.
At the end of the fifth year, 100
units must be found to redeem the maturing security issued the first year (that
“loaned” 100 units to the government) in addition to 100 units of interest that
must be paid. Congress has an obligation to pay 200 units. This factor alone
makes it obvious that more debt must be incurred to continue the scheme. The
inescapable whirlpool of usury debt can only avoid obvious default by
increasing the value of future securities. Increasing the value of issued
securities merely postpones the inevitable result.
As the sixth year approaches, the Fed
holds 500 units of securities that must be redeemed by the Treasury before year
eleven. The Fed has already received 200 units as interest while Congress
retains 300 units from those securities. Before year eleven, the securities
will accumulate an additional 300 units of interest payable to the Fed. That
accounts for the entire 1000 units of securities and interest that have been
involved over the five years. (Each of the five 100 unit securities involved 100
units of interest.)
Do not let the subtly of the numbers
escape you. As the example demonstrates, the Fed receives the total value of
the security and the interest if it does not sell the security. Only 500 units
were created by the securities but 1000 units (interest and principal) were
somehow acquired by the Fed. The only way for Congress to get the funding is to
issue a 200 unit security at the end of the fifth and subsequent years and ALL
of the value will be instantly due the Fed. The scheme is not only perpetual
but it must increase in size to continue.
When the 200 unit security matures,
the value will belong to the Fed. And then a larger security must be issued to
pay for the 200 unit security and the accruing interest further down the road.
This is the methodology of any Ponzi scheme. The increase in the required size
of deficit spending to cover the interest must be large enough to make the
interest payment a relatively acceptable percentage to minimize public
hostility.
[FN: The 100 unit roll-over value for
the example’s year five reached $7.0 trillion in year 2010. An additional $1.4
trillion deficit spending accounts for the $8.4 trillion received from the
Treasury auctions. Ref. Post.]
A high rate of interest has been
selected for the example to minimize repetitive calculations. A ten percent
interest rate will return 100 percent of the security value in ten years; a
five percent interest rate will take twenty years. Lower rates of interest
merely require more years to reach the same inherent bankruptcy and tend to
beguile the patsies. (Actually, bankruptcy occurs the first year irrespective
of the interest rate, but then again, since the debt can never be paid off, the
entire scheme is based upon fraud. A contract based upon fraud is void from its
inception.)
But 5 year securities are a slow
game. If we shifted our attention to 13 week bills, or even four-week bills,
each obligation will quickly mature and must repeatedly be rolled over. Each
new issue can cause the creation of fiat money (inflation) and is profit for
the Fed to say nothing of lucrative transaction fees and commissions for Wall
Street cronies. If time lapse between bid and issue dates are ignored, the
roll-over of four week 100 unit securities can be repeated thirteen times within
a year. The gain of 1300 units of profit for the Fed only involves 100 units of
national debt.
An economic scheme that utilizes
later investors to pay the interest due earlier investors is identified as a
Ponzi scheme. This is precisely the scheme that has been presented above.
A government publication has noted
the fiscal policy insecurity: “(T)his growing gap between (Government’s)
receipts and total spending …cannot be sustained indefinitely.” http://www.fms.treas.gov/frsummary/frsummary2010.pdf
page 3 of 12. The statement was undoubtedly intended to support confiscation of
more wealth from the citizens to perpetuate the Ponzi scheme..
ALL FIAT MONEY BECOMES A PROFIT FOR THE FED HIDDEN BY
THE FRBNY; THE OPERATION TRANSFERS ALL THE WEALTH OF THE NATION TO “FINANCIERS”
If the Fed holds the security issued
for the national debt until maturity, as in the example, the government must
redeem it at maturity. The government has no money (it spent the fiat money
created upon issuance of the security) so it gives the Fed a roll-over
security. The U.S. Treasury is authorized by 31 USC #3111 to issue an
“obligation” to buy or redeem maturing debt. The Fed can then sell the
replacement security and has that value as profit. In actual practice, the Fed
can sell the initial security and the two steps have merged into one. The
waiting period to receive the profit has been eliminated.
The handling of auction funds is the
responsibility of the FRBNY. Ref. GAO FINANCIAL REPORT TO SECRETARY OF
TREASURY, Nov 2010, page 17 of net; p14 ofhardcopy.http://www.treasurydirect.gov/govt/reports/pd/feddebt/feddebt_ann2010.pdf.
Confirmation of the practice is in
ACCOUNTING FOR TREASURY SECURITIES AT THE FEDERAL RESERVE BANK OF NEW YORK ,
GAO /AFMD-84-10, May 2, 1984, page 9 of 30,http://archive.gao.gov/d5t1/124060.pdf.
Additional confirmation is found in the Fed’s ANNUAL REPORT: BUDGET REVIEW
2010, “The Reserve Banks auction, issue, maintain and redeem securities… (and
handle) paper U.S. savings bonds and book-entry marketable Treasury
securities.” p 5.
The total value of auctions in 2010
was $8.4 trillion with approximately $6 trillion matured in less than one year.
http://www.treasurydirect.gov/instit/annceresult/press/preanre/2010/2010.htm ; http://www.treasurydirect.gov/RI/OFAuctions?form=histQuery
.
The $8.4 trillion in revenue does not
reveal itself in the ANNUAL REPORT TO CONGRESS; Ref. Tables 10 and 11, pages
454 to 462 REPORT for 2009. (Auctions are not Open Market transactions.
Securities that are not sold are assigned to SOMC.) This $8.4 trillion is
concealed from Congress and the public. The Fed claims it makes no profit from
the auctions.
“Aha!” exclaims a disciple of the
Fed. “The above analyze proves the integrity of the Fed. The $8.4 trillion is
obviously being used to pay the redeemed securities from prior years and the
sale and redemptions are off-setting.” And thus would the Fed beguile the
naïve. Indeed, the Treasury’s receiving the value from auctions for that
purpose is widely proclaimed in media publications. Treasury financial
statements claim “borrowing from the public” finances government operations.
However, direct transfer of money from the public cannot, in any way, expand
the monetary system or result in the creation of fiat money (i.e., inflation)
any more than can the payment of taxes by a private entity. The label is
deliberately misleading.
The $8.4 trillion includes $7
trillion to redeem roll-over securities from prior years with $1.4 trillion
being available from deficit spending securities authorized by Congress
(assuming accounts of the Fed are static). The securities from deficit spending
can be sold at auction and the $1.4 trillion is retained by the Fed while
Congress spends the book entry credits. Where the $1.4 trillion value from the
auctions is entered into the books of the Fed, and to where it goes, is not
available information.
The $7 trillion for the rollover of
redeemed securities does not produce inflation or add to the national debt. The
auctioning of $1.4 trillion deficit funding securities increases the amount of
credit in existence which contributes to inflation. It also increases the
national debt. By merging the two different groups of auction funds, the
receipts and payments for redeemed securities (involving PDs) can be concealed
with receipts of debt securities and payments to owners (PDs). The national
debt has increased $7 trillion during the past 6 years and is considered hidden
profit by the Fed.
If the value of the auctioned deficit
security went to the government, it would neutralize the loan and there would
be no inflation since the money pays off the debt initially created. When the
Fed retains the money, the money supply is increased (inflation) and the
national debt increases.
In a simplistic succinct scenario,
the payment of government (deficit) bills is essentially paid with money off of
the printing press. That money is then in circulation and, after moving through
the financial structure, eventually becomes the funds that will be used to
purchase the security owned by the Fed and sold at the auction. The trillion
dollars created by deficit spending winds up in the pocket of the Fed. This
torrent of money can then be used to enhance control over the economic and
political spheres. One objective appears to be a “new global currency” under
direct control of the economic sphere that would eliminate any restraints from
political structures.
It is assumed the IRS knows nothing
of this income or profit. Whether Title 12 section 531 or some other provision
excludes such income for the corporate Fed from taxation is for Congress to
determine. However, taxation of the Fed is completely different from taxation
of (unknown) shareholders of the BOG..
Every dollar of inflation is profit
for the Fed yet it does not show up on any income statement or balance sheet of
the Fed. Title 12 section 247 imposes upon the BOG a responsibility to make a
“full report“ to congress. The law also provides “Whoever embezzles, steals,
purloins…money or thing of value of the U.S…” is guilty of a crime. Ref. 18 USC
641. Anyone who knowingly “covers up by any trick, scheme, or device a material
fact” of a fraud against the United States can be imprisoned for not more than
five years. Ref. 18 USC 1001. In addition, if two or more individuals
“conspire…to defraud the U.S. (and) effect the object of the conspiracy” they
are each punishable by incarceration. Ref. 18 USC 371. Anyone knowing of such
an offense who “relieves, comforts or assists the offender…to prevent his
apprehension, trial or punishment, is an accessory after the fact.” Ref. 18 USC
section 3, see also 656, 657, 1005, 1341, 1344. Each of the approximate 500
auctions annually could be a separate indictment count.
Does “accessory” include any
congress-critter who, after being informed of this scheme, does not expose and
prosecute the perfidy of the Fed?
INITIATING THE SCAM—AND THE RESULT
Similar historic banking operations
declared they loaned value to the king and therefore they should receive
interest from the loan. The pretense is a sham. Congress and the Fed have
agreed they are going to rip-off the public by devaluating the currency. Each
party acquires purchasing power from the scheme. Congress gives a promise to
pay (a security or collateral) which is given to the Fed and the Fed gives a
promise to honor the government’s checks with fiat book-entry money (printing
press money, i.e., FRN‘s, a legal tender–a debt of the Fed). A “legal tender”
is a commodity that is required by law to be accepted for a contract
stipulating another commodity (i.e., the original contract is for dollars; you
must accept FRN denominated in dollars). It is an acknowledgement of debt that
can never be paid because there is no lawful money available. Title 12 section
411 clearly stipulates “(Federal Reserve notes) shall be redeemed in lawful
money on demand at the Treasury Department of the United States… or at any
Federal Reserve bank.” Good luck with that. You will only receive more debt of
an under-capitalized federal corporation created by Wall Street bankers during
a week-long retreat on Jekyll Island and blessed by a rump session of Congress.
To get the scheme started and the con
game financed by third parties, it must have the appearance that interest is
their source of profit and a gain must be made from the brokerage difference. A
prime concern for the Fed under these conditions would be the difference in the
value credited to the Treasury account and the value received from the auction.
If the value of securities purchased by the public is transmitted directly to
the Treasury, there cannot be any inflation, but then there is no gain to the
Fed from book-entry money.
If the Fed projected a guise of a
brokerage firm selling government bonds to the public, it would be a simple
arrangement with minimal investment or risk. The currency in circulation in
1913 was non-interest bearing U.S. Notes. After the operation was set up and
the New York Federal Bank was handling the accounting, it would be a simple
shift of accounting procedures to have the securities accepted by the bank as
owner instead of as a broker. The difference allows the bank to create fiat money
(inflation or Federal Reserve Notes) as a profit for the bank. Whether this
falls within the parameters of embezzlement or other crimes depends upon many
conditions.
The scam could use vouchers or
warrants by the FRBNY to control disbursement of roll-over funds to redeem
maturing securities identified by CUSIP numbers and presented by authorized
financial institutes. Similar warrants could be used with bogus CUSIP numbers
to disperse funds received from auctioned deficit spending securities. The
distributed profits are thus disguised as an expense of redeeming securities
while net earnings drop to zero. Only the signatory of the warrants need be
knowledgeable of the scam. But nobody has seen the accounting records.
The courts have repeatedly concluded
the profits of the Fed belong to the United States. Ref. Scott v FRB of Kansas
City, 405 F3d 532, 535; In Re Hoag Ranches, 846 F2d 1227. The fact that the
income is not reported is suggestive of subterfuge.
But the courts are merely upholding
legislated provisions. The disposition of the Fed’s profit was established by
the Federal Reserve legislation of 1913: “[A]ll the net earnings (of Federal
Reserve banks] shall be paid to the United States as a franchise tax…(and) be
applied to the reduction of the outstanding bonded indebtedness of the United
States…” Section 7, paragraphs 1,2. Any reduction of the “bonded indebtedness”
(nation debt) is unknown; any net profit received from the Fed may has been
pooled with general revenue. The residual of a Fed bank’s assets after
dissolution or liquidation “shall be paid to and become the property of the
United States.” id. Ref. 12 USC section 289, 290.
The Fed claims exemption from
unrestricted audit by the GAO. However, the Accounting and Auditing Act of 1950
clearly established authority for the GAO to verify “all essential facts
regarding the bonded and other indebtedness of the Government…” There is no
exception for, or even mention of, the Federal Reserve. The Federal Banking
Agency Audit Act of 1978 amended the above Act and exempted the Fed from audits
of FOMC transactions, of certain foreign transactions, and of policy matters.
The above Acts are now codified as Title 31 section 714. The Fed additionally
claims that since it does not receive funds from the government or handle
government money it is not subject to audit by the GAO. (The non-receiving of
government funds is but one facet inconsistent with the parameters of a
government agency.)
None of the above claims appear to
exempt the auction accounts from audit by the GAO.
First off, the Fed DOES handle
government funds. The auction transactions, and the IRS collection accounts,
are both government funds. The accounts are clearly subject to review by the
GAO to assure efficient and correct handling of government finances and to
prevent theft or unacceptable accounting. Secondly, the exclusions of section
714 do not prohibit review of the auction accounts. It appears Congress can
instruct the GAO to make such an audit at any time, even without the necessity
of additional legislation.
The Fed’s claim of exemption from GAO
audit is inane. The Fed is mandated by 12 USC 247 to “make a full report to
Congress.” And the Fed believes the government is prevented from verifying
compliance with that requirement? In addition, the Federal Reserve Act of 1913
clearly identified all profit of the Fed belongs to the government. And the
government is supposed to be prevented from accounting for the profit from the
auctions that is confiscated by the (unknown) owners of the Board of Governors?
Such a claim defies logic.
But perhaps the Fed may contend the
accounts are not records of the Fed’s operation at all but are merely private
records of a specific customer—and the customer has never requested a review of
the account. The embezzlement would be self-evident.
The BOG consistently claims the
status of a government agency, but that status has not been legislated or
seriously challenged (to my knowledge). The Supreme Court has distinguished
government contractors from federal agencies: “A critical element in
distinguishing an agency from a contractor is the power of the Federal
Government to control the detailed physical performance of the
contractor.”
United States v Orleans, 425 US 807, 814 (1976). The
BOG appears to be totally void of detailed government control and therefore
vulnerable to being construed as a government contractor.
It is a source of amazement that
Bloomberg news took Freedom of Information Act requests to the Court of Appeals
to discover the Fed had loaned $7.7 trillion to the TBTF and international
banks after the Fed had successfully hidden the information from the
government. (Are these the owners of the BOG? Where did the funds come
from?) The government deemed specific legislation was necessary to
obtain similar information. Ref. Report GAO-11-696. Professor Robert Auerbach
claims in DECEPTION AND ABUSE AT THE FED such funds to foreign banks normally
require congressional approval.
Mr. Auerbach compiles endless
occasions in which the Fed mislead Congressional committees and evaded all
efforts by Congress to control the Fed while wracking the economy.
To put $7.7 trillion in perspective,
the 2010 operation of the U.S. government involved $3.4 trillion and that
includes the $1.3 trillion deficit. The entire amount of taxes collected by the
U.S. government was only $2.1 trillion.
If asked “Who owns the T-securities
that are sold at the auctions–the Fed or the U.S. government?” a Fed representative
will respond “The securities are a liability of the government.” An astute
observer will note the inquiry was avoided; it was not answered.
A newspaper article a couple of years
ago informed us the annual increase in interest to be 15 percent while the
budget only grew 7 percent. That reflects the exponential growth of interest.
More recently the deficit has been increasing much faster to rescue financial
institutes from default. Professor Bob Blain, Southern Illinois University,
Edwardsville has graphed the exponential growth in debt from 1915 to be
irregular only during the 1930’s.
In 1790 during congressional
consideration of Alexander Hamilton’s proposal to pay the national debt with
usury based obligation placed upon the citizens, Congressman James Jackson,
after lengthy reflection on the devastation similar plans had imposed on
European countries and cities, included the following observation to Congress:
“Let us take warning by the errors of
Europe, and guard against the introduction of a system followed by calamities
so universal…The funding of the debt will occasion enormous taxes for the
payment of the interest…(such a system) must hereafter settle upon our
posterity a burthen (sic) which they can neither bear nor relieve themselves
from.” Ref. ANNALS OF CONGRESS,
Vol. 1, 1790, pp. 1141-2.
In actual practice within the United
States, a collection of taxes for part of the government spending is well
known. Payment of part of the government expenses by taxation does not alter
the government’s usury program; for analytical analysis they can stand alone.
The ninety year pattern of increasingly larger deficit spending is the
escalation as the climax of chaos beyond description approaches.
The end result of economic
exploitation by usury is becoming transparent in Europe. As various nations
become indebted to “financiers,” the demand to satisfy the debt includes the
selling of national heirlooms and infrastructure to the creditors. Airports,
roads, government buildings, and all resources are fair game. It will not be
the Chinese or Japanese that acquire property. Market securities will be
purchased at reduced prices by the Fed, and then the Fed will acquire assets at
fire-sale prices. It will be the unknown shareholders of the BOG that acquire
title. Ownership of land and resources by a financial oligarchy is but one
example of feudalism—the government becomes a mere facade.
The outstanding funded debt that is
even now overhanging the citizens of the United States, currently $48,000 per
individual, is more than enough to impose slavery if the people submit. The
unfunded debt is in the neighborhood of $160,000 per individual. If the people
can be conditioned to believe they must pay the debt, the income tax (if it
exists) can be used to confiscate 100 percent of their income and the masses
must subsist on government largess. The courts continue to uphold income tax
indictments that rely upon statutes applicable to all taxes as identifying a
“known legal duty” for income taxes (i.e., 7201 -7215) so the make-be-leave
statute that imposes an income tax will not be submitted to contestation with
the burden of proof upon the government. The pursuit of a livelihood, long
secured as a Constitutional Right by the clause of Liberty, cannot be a proper
object for a revenue tax. The Republic of sovereign citizens has been degraded
to a totalitarian nation of obsequious vassals. The hallmark of every Great
Society has been the confidence that each individual has been able to retain
and enjoy the fruits of his labor, and that is being destroyed in the United
States.
Benjamin Ginsberg documents in FATAL
EMBRACE numerous times when societies have revolted against oppression
involving “financiers.” One interesting revelation by Ben involved Barons
revolting after financiers induced King John to invade Normandy. The Barons
would have had to pay for the campaign and it lead to the Magna Carta. Ben
laments the financiers subsequently had their estates confiscated and were
exiled. War-mongering has been a consistent money-maker for financiers. What
the people of the U.S. will tolerate remains to be seen.
For decades, the economic
exploitation of other nations, including orchestrated coups of elected
non-compliant governments as formulated by Kermit Roosevelt, without any regard
for laws whether domestic or international, has been the modus operand of the
CIA, IMF, and World Bank. Ref. CONFESSIONS OF AN ECONOMIC HIT MAN by John
Perkins; KILLING HOPE by William Blum; Google CIA; ROGUE AGENCY RUN AMUCK. It
should be apparent the economic objective has been for the greed of financiers
on Wall Street even when financed by, implemented with, and overseen by
government bureaucracy including the U.S. military. The U.S. government gains
nothing from Empire building. The U.S. and European financiers have consorted
to plunder the world. Ref. TRAGEDY AND HOPE by Carroll Quigley. Now, as
humongous deficits are demanded to give fiat funds to the Fed and rescue
financial institutes from their fraudulent scams even after TARP, Maiden Lane,
QE1 and QE2 have depleted its coffers and international bankruptcy still looms,
and after military facilities/actions throughout the world to protect their
international economic exploitation have bankrupt the Nation, the chickens are
coming home to roost.
[FN: Much has been made
over the Federal Reserve banks being privately owned as distinguished from a
government agency. The confusion is fueled by names and definitions.
The twelve FR Banks (incorporated,
and franchisees ?) have been identified by courts as privately owned by the
commercial banks (shareholders) each with a nine member board of directors—for
the issues before the courts. FDIC is another FR corporation statutorily
identified as a government agency. The FR Board of Governors is separately
incorporated (?) with shareholders alleged to be foreign and NY bankers. The
BOG has complete administrative and supervisory control of the FR Banks—they
can remove a director without cause or they can rescind a policy. The BOG has
assumed the guise of a government agency but does not comport with the
parameters of an agency as established by the courts nor with the legislated
definition of an agency.
The FR system juggle adjudication and
FOIA actions to obtain the best position of a private versus agency status. This
conclusion is confirmed, but may not be continued, after Fox News Network v BOG
of FR, 601 F3d 158 (2010, 2nd Cir);
References:
Dr. Bob Blain, Emeritus Professor of
Sociology at Southern Illinois University, Edwardsville, in a published paper
“Revisiting U.S. Public and Private Debt” released in 2008 observes the
exponential increase in national debt from 1915 and the destruction inflicted
upon historic societies by usury based monetary systems.
FATAL EMBRACE by Benjamin Ginsberg
documents historic occasions in which a usury debt based economic system (but
not so identified) resulted in the “financiers” facing public fury including deportation,
confiscation of estates, and physical abuse of the individuals involved.
GREENSPAN’S BUBBLES; THE AGE OF
IGNORANCE AT THE FEDERAL RESERVE by Bill Fleckenstein reveals how the Fed
suppressed Federal Fund interest rates to create a false prosperity that
devastated the economy for 20 years and destroyed the home construction
industry.
THIS TIME IS DIFFERENT; EIGHT
CENTURIES OF FINANCIAL FOLLY by Carmen Reinhart & Ken Rogoff
reviews sovereign defaults as seen by an economist speaking to the International
Monetary Fund/World Bank. It is the nature of governments to steal from the
people.
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