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A Word about the Financial Crisis
the Fed's Money is Not Tax Money
The Fed is a Pernicious System

From Drell's Descants

[COMMENT:  More on the perverse nature of the Federal Reserve.  We ought to get rid of it as soon as possible, and return to gold as the foundation of our money supply.  The Fed is the cause of much, if not most, of inflation we experience, which amounts to a substantial tax on all of us.   And much of that inflation goes into the pockets of the member banks.    

That the Fed is not a government entity, and thus the bailout of AIG is not being done with tax money, seems to me irrelevant.  The Fed is currently (and wrongly) the foundation of our money system.  And a bailout of AIG by it will affect all of us.     E. Fox]

It is important to remember during the media hoopla that the Federal Reserve is NOT the federal government. The Federal Reserve is a government chartered but yet privately owned bank, being owned by the member banks of the Federal Reserve System. In short, it is complicated, but the AIG deal is not a government bailout, but an out of court receivership by the Fed as its largest creditor. The Fed's funds come from deposits made by private member banks and purchases of Fed stock, as well as fees and interest it charges on loans. The Fed is self supporting and its excess funds are paid to the U.S. Treasury if the Fed chooses not to keep them. Does a government keep a balance sheet entry of paid in capital? Nope. Does the Fed? Yep. In any event, it is a horrible misconception that the Fed's money is tax money. Well, it just isn't.

Now, I am not a big fan of the Fed as it leaves bankers largely in charge of the economy, rather than the government, but we've tried this both ways in different times in the history of our country. It also really bothers me that the government no longer produces paper money, but has the Federal Reserve issue Federal Reserve Notes, rather than gold certificates, silver certificates, or United States Notes that were issued by the Federal Government. The reason this bothers me is that the Fed charges our government interest every time they want to increase the money supply; in short, the government makes a note to the Fed (known as a Treasury Bill) upon which the Fed issues more cash. I think it is dumb to pay interest to a bank in order to issue a government's fiat currency that's backed by, well, nothing, but we've been doing this for almost 100 years.

[COMMENT:  Why should taxpayers pay interest on money which the Fed creates out of thin air?   E. Fox] 

However, joe taxpayer out there has no reason to get into a snit because the Fed loaned ITS money to AIG. Its their damn business. Now, if Congress wanted to do so, it statutorily has the right to buy back all stock in the Fed system for a nominal amount. But, short of that, we as taxpayers don't really have a say.

[COMMENT:  then we had better say that!  Buy it all back, if that is what we need to do, and have our own elected legislators govern our money supply.  But we had also better renew our Biblical foundations so that we have enough sense to control our own legislators.   It is my understanding that the Fed has never been audited.  That is appalling.     E. Fox]  

It is frankly amazing that our society is so completely in the dark, including the media and apparently our candidates for Presidency, about how all this stuff works. It is not a government bailout if the government doesn't do it. The Federal Reserve is a bank and they can make loans. The only scary part is that the money in your wallet is FRN's which is now only something like 86% backed by the full faith and credit of the United States - FRN's are now backed but such things as obligations owed by Maiden Lane, LLC, (which was formed to purchase Bear Stearns) and now 80% of the stock of AIG.

You might be surprised at what you find if you click here, here, and here.

If stuff in the Episcopal Church blows your mind, trying to learn about the Fed and how our monetary system works. See which one keeps you up at night thinking about it after words. Keep in mind that the Fed is a bank and is kinda just doing what banks do - make loans, make money. On the other hand, should we really let a bank be the sole issuer of legal tender in this country, and have the taxpayers pay them interest for doing so? This is what taxpayers should be ticked about, not the AIG loan. Getting whizzed about the AIG loan misses the whole big picture of the real mess we are in.

I'd really love it if someone out there would ask Obama and McCain whether either of them would abolish the Federal Reserve Bank. Their answers would certainly be a litmus test for my vote, and they don't have to necessarily be pro or anti Federal Reserve. I would like to know if they really understand what is going on, especially since the economy is supposed to be the number one issue in this election.

NOTE: Here are some quotes from some of our greatest leaders on the subject of a private national bank.  E. Fox:

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks ... will deprive the people of all property until their children wakeup homeless on the continent their fathers conquered... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." Thomas Jefferson

"I sincerely believe ... that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale." Thomas Jefferson

"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money." Daniel Webster

"Whoever controls the volume of money in any country is absolute master of all industry and commerce." James A. Garfield

"All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation." John Adams

THE MONEYMASTERS -- GET IT & SEE IT --   the best history of how money has been used to control nations, and now bids to control the world.  This is the core of the Globalist conspiracy.   A 3.5 hour video scanning from Rome to the present and our own so-called Federal Reserve.  The best  I have seen on the subject.  You will not view politics or money the same...  Documentation is superb.    I used to wonder if this stuff was "for real".   But in some 40 years of looking I have yet to see a rebuttal.  The Money Masters want to control the world.     You can see the YouTube version, which is the same & free, but of lesser visual quality at http://video.google.com/videoplay?docid=-515319560256183936&hl=en
        If we recover our moral consensus, possible only under God, we will run the criminals from the arena.    E. Fox.   

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Date Posted -  09/19/2008   -   Date Last Edited - 09/15/2012