- CNBC Admits We Are Slaves Under
Banking Cartel -
Established in 1944 and named after the New Hampshire town where the agreements were
made, Bretton Woods I created a system that made the dollar the reserve currency of the world. In addition, the
International Monetary Fund (IMF) and the World Bank were established.
Globalization is the process of breaking through the protective barriers designed to
separate the nation-states from the world system. Between 1944 and 2008 (BW I and II) all the nation-state barriers
have been removed with exception of the national regulatory laws governing financial institutions, insurance
companies, mortgages, and Wall Street.
The real purpose of BWII is to establish the framework for a global regulatory system.
This also presents the possibility of merging all regional currencies into a global currency.
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The Destruction of America:
Brought to You By JP Morgan Chase
Alex Jones analyzes a JP Morgan Chase ad that was in heavy rotation over the Thanksgiving holiday
that is meant to sell the idea that the mega-bank is the backbone of America, and closely tied to its dream.
Nothing could be further from the truth, as the predatory institution, along with the other 'Too Big to Fail'
banks that received bailouts, have used corporate welfare to sellout the nation, ship jobs overseas, reap
profits on money lent from the Federal Reserve at zero interest, while saddling huge debts upon the people
through the larger derivatives scheme. JP Morgan Chase is at the heart of Rothschild and Rockefeller monetary
interests; no wonder that its CEO Jamie Dimon sits on the New York Federal Reserve board of directors, while
wealthy elites like Warren Buffett have called for him to replace Tim Geithner (another Fed insider) at the
What would happen if the Federal Reserve was shut down
permanently? That is a question that CNBC asked recently, but unfortunately most Americans don’t really think about the Fed
much. Most Americans are content with believing that the Federal Reserve is just another stuffy government
agency that sets our interest rates and that is watching out for the best interests of the American people.
But that is not the case at all. The truth is that the Federal Reserve is a private banking cartel that has been
designed to systematically destroy the value of our currency, drain the wealth of the American public and enslave
the federal government to perpetually expanding debt. During this election year, the economy is the number one
issue that voters are concerned about. But instead of endlessly blaming both political parties, the truth is that
most of the blame should be placed at the feet of the Federal Reserve. The Federal Reserve has more power over the
performance of the U.S. economy than anyone else does. The Federal Reserve controls the money supply, the Federal
Reserve sets the interest rates and the Federal Reserve hands out bailouts to the big banks that absolutely dwarf
anything that Congress ever did. If the American people are ever going to learn what is really going on with our
economy, then it is absolutely imperative that they get educated about the Federal Reserve.
The following are 10 things that every American should know about the Federal Reserve….
#1 The Federal Reserve System Is A Privately Owned Banking
The Federal Reserve
isnot a government
agency.The truth is that it is a privately owned central bank. It is
owned by the banks that are members of the Federal Reserve system. We do not know how much of the system each bank
owns, because that has never been disclosed to the American people.
The Federal Reserve openly admits that it is privately owned. When it was defending itself against a Bloomberg
request for information under the Freedom of Information Act, the Federal Reserve stated unequivocally in court
that it was“not an agency” of the federal government and therefore not subject to the Freedom of
In fact, if you want to find out that the Federal Reserve system is owned by the member banks, all you have to
do is go to the Federal Reserve website….
The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of
the nation’s central banking system, are organized much like private corporations–possibly leading to some
confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However,
owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not
operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the
System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent
Foreign governments and foreign banks do own significant ownership interests in the member banks that own the
Federal Reserve system. So it would be accurate to say that the Federal Reserve is partially foreign-owned.
But until the exact ownership shares of the Federal Reserve are revealed, we will never know to what extent the
Fed is foreign-owned.
#2 The Federal Reserve System Is A Perpetual Debt
As long as the Federal Reserve System exists, U.S. government debt will continue to go up and up and up.
This runs contrary to the conventional wisdom that Democrats and Republicans would have us believe, but
unfortunately it is true.
The way our system works, whenever more money is created more debt is created as well.
For example, whenever the U.S. government wants to spend more money than it takes in (which happens constantly),
it has to go ask the Federal Reserve for it. The federal government gives U.S. Treasury bonds to the Federal
Reserve, and the Federal Reserve gives the U.S. government “Federal Reserve Notes” in return. Usually this is just
So where does the Federal Reserve get the Federal Reserve Notes?
It just creates them out of thin air.
Wouldn’t you like to be able to create money out of thin air?
Instead of issuing money directly, the U.S. government lets the Federal Reserve create it out of thin air and
then the U.S. government borrows it.
Talk about stupid.
When this new debt is created, the amount of interest that the U.S. government will eventually pay on that debt
is not also created.
So where will that money come from?
Well, eventually the U.S. government will have to go back to the Federal Reserve to get even more money to
finance the ever expanding debt that it has gotten itself trapped into.
It is a debt spiral that is designed to go on perpetually.
You see, the reality is that the money supply is designed to constantly expand under the Federal Reserve system.
That is why we have all become accustomed to thinking of inflation as “normal”.
So what does the Federal Reserve do with the U.S. Treasury bonds that it gets from the U.S. government?
Well, it sells them off to others. There are lots of people out there that have made a ton of money by holding
U.S. government debt.
In fiscal 2011, the U.S. government paid out 454 billion dollars just in interest on the national debt.
That is 454 billion dollars that was taken out of our pockets and put into the pockets of wealthy individuals
and foreign governments around the globe.
The truth is that our current debt-based monetary system was designed by greedy bankers that wanted to make
enormous profits by using the Federal Reserve as a tool to create money out of thin air and lend it to the U.S.
government at interest.
And that plan is working quite well.
Most Americans today don’t understand how any of this works, but many prominent Americans in the past did
That is to say, under the old way any time we wish to add to the national wealth we are compelled to add
to the national debt.
Now, that is what Henry Ford wants to prevent. He thinks it is stupid, and so do I, that for the loan of
$30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000 — that is
what it amounts to, with interest. People who will not turn a shovelful of dirt nor contribute a pound of
material will collect more money from the United States than will the people who supply the material and do the
work. That is the terrible thing about interest. In all our great bond issues the interest is always greater
than the principal. All of the great public works cost more than twice the actual cost, on that account. Under
the present system of doing business we simply add 120 to 150 per cent, to the stated cost.
But here is the point: If our nation can issue a dollar bond, it can issue a dollar bill. The element
that makes the bond good makes the bill good.
We should have listened to men like Edison and Ford.
But we didn’t.
And so we pay the price.
On July 1, 1914 (a few months after the Fed was created) the U.S. national debt was 2.9 billion dollars.
Today, it is more than more than 5000 times larger.
Yes, the perpetual debt machine is working quite well, and most Americans do not even realize what is
#3 The Federal Reserve Has Destroyed More Than 96% Of The Value Of The
Did you know that the U.S. dollar has lost 96.2 percent of its value since 1900? Of course almost all of that decline has happened
since the Federal Reserve was created in 1913.
Because the money supply is designed to expand constantly, it is guaranteed that all of our dollars will
constantly lose value.
Inflation is a “hidden tax” that continually robs us all of our wealth. The Federal Reserve always says that it
is “committed” to controlling inflation, but that never seems to work out so well.
And current Federal Reserve Chairman Ben Bernanke says that it is actually a good thing to have a little bit of
inflation. He plans to try to keep the inflation rate at about 2 percent in the coming years.
So what is so bad about 2 percent? That doesn’t sound so bad, does it?
Well, just consider the following excerpt from a recent Forbes article….
The Federal Reserve Open Market Committee (FOMC) has made it official: After its latest two day meeting,
it announced its goal to devalue the dollar by 33% over the next 20 years. The debauch of the dollar will be
even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.
#4 The Federal Reserve Can Bail Out Whoever It Wants To With No
The American people got so upset about the bailouts that Congress gave to the Wall Street banks and to the big
automakers, but did you know that the biggest bailouts of all were given out by the Federal Reserve?
Thanks to a very limited audit of the Federal Reserve that Congress approved a while back, we learned that the
trillions of dollars in secret bailout loans to the big Wall Street banks during the last financial
crisis. They even secretly loaned out hundreds of billions of dollars to foreign banks.
According to the results of the limited Fed audit mentioned above, a total of$16.1 trillion in secret loans were made by the Federal Reserve between December 1,
2007 and July 21, 2010.
The following is a list of loan recipients that was taken directly from page 131of the audit report….
Citigroup - $2.513 trillion
Morgan Stanley - $2.041 trillion
Merrill Lynch - $1.949 trillion
Bank of America - $1.344 trillion
Barclays PLC - $868 billion
Bear Sterns - $853 billion
Goldman Sachs - $814 billion
Royal Bank of Scotland - $541 billion
JP Morgan Chase - $391 billion
Deutsche Bank - $354 billion
UBS - $287 billion
Credit Suisse - $262 billion
Lehman Brothers - $183 billion
Bank of Scotland - $181 billion
BNP Paribas - $175 billion
Wells Fargo - $159 billion
Dexia - $159 billion
Wachovia - $142 billion
Dresdner Bank - $135 billion
Societe Generale - $124 billion
“All Other Borrowers” - $2.639 trillion
So why haven’t we heard more about this?
This is scandalous.
In addition, it turns out that the Fed paid
enormous sums of money to the big Wall Street banks to help “administer” these nearly interest-free
Not only did the Federal Reserve give 16.1 trillion dollars in nearly interest-free loans to the “too
big to fail” banks, the Fed also paid them over 600 million dollars to help run the emergency lending program.
According to the GAO, the Federal Reserve shelled out an astounding $659.4 million in “fees” to the very financial institutions which caused the
financial crisis in the first place.
Does reading that make you angry?
#5 The Federal Reserve Is Paying Banks Not To Lend
Did you know that the Federal Reserve is actually paying banks not to make loans?
It is true.
Section 128 of the Emergency Economic Stabilization Act of 2008 allows the Federal Reserve to pay interest on
“excess reserves” that U.S. banks park at the Fed.
So the banks can just send their cash to the Fed and watch the money come rolling in risk-free.
So are many banks taking advantage of this?
You tell me. Just check out the chart below. The amount of “excess reserves” parked at the Fed has gone from
nearly nothing to about 1.5 trillion dollarssince 2008….
But shouldn’t the banks be lending the money to us so that we can start businesses and buy homes?
You would think that is how it is supposed to work.
Unfortunately, the Federal Reserve is not working for us.
The Federal Reserve is working for the big banks.
Sadly, most Americans have no idea what is going on.
Another example of this is the government debt carry trade.
Here is how it works. The Federal Reserve lends gigantic piles of nearly interest-free cash to the big Wall
Street banks, and in turn those banks use the money to buy up huge amounts of government debt. Since the return on
government debt is higher, the banks are able to make large profits very easily and with very little risk.
Consider this: we pretend that banks are private businesses that should be allowed to run their own
affairs. But they are the biggest scroungers of public money of our time. Banks are lent vast sums of money by
central banks at near-zero interest. They lend that money to us or back to the government at higher rates and
rake in the difference by the billion. They don’t even have to make clever investments to make huge
That is a pretty good little scam they have got going, wouldn’t you say?
#6 The Federal Reserve Creates Artificial Economic Bubbles That Are
By allowing a centralized authority such as the Federal Reserve to dictate interest rates, it creates an
environment where financial bubbles can be created very easily.
Over the past several decades, we have seen bubble after bubble. Most of these have been the result of the
Federal Reserve keeping interest rates artificially low. If the free market had been setting interest rates all
this time, things would have never gotten so far out of hand.
For example, the housing crash would have
never been so horrific if the Federal Reserve had not created such ideal conditions for a housing bubble in the
first place. But we allow the Fed to continue to make the same mistakes.
Right now, the Federal Reserve continues to set interest rates much, much lower than they should be. This is
causing a tremendous misallocation of economic resources, and there will be massive consequences for that down the
#7 The Federal Reserve System Is Dominated By The Big Wall Street
Even since it was created, the Federal Reserve system has been dominated by the big Wall Street banks.
The New York representative is the only permanent member of the Federal Open Market Committee, while
other regional banks rotate in 2 and 3 year intervals. The former head of the New York Fed, Timothy Geithner,
is now U.S. Treasury Secretary. The truth is that the Federal Reserve Bank of New York has always been the most
important of the regional Fed banks by far, and in turn the Federal Reserve Bank of New York has always been
dominated by Wall Street and the major New York banks.
#8 It Is Not An Accident That We Saw The Personal Income Tax And The
Federal Reserve System Both Come Into Existence In 1913
On February 3rd, 1913 the 16th Amendment to the U.S. Constitution was ratified. Later that year, the United States Revenue Act of 1913 imposed a personal income tax on the American
people and we have had one ever since.
Without a personal income tax, it is hard to have a central bank. It takes a lot of money to finance all of the
government debt that a central banking system creates.
It is no accident that the 16th Amendment was ratified in 1913 and the Federal Reserve system was also created
They have a symbiotic relationship and they are designed to work together.
We could fill Congress with people that are committed to ending this oppressive system, but so far we have
chosen not to do that.
So our children and our grandchildren will face a lifetime of debt slavery because of us.
I am sure they will be thankful for that.
#9 The Current Federal Reserve Chairman, Ben Bernanke, Has A Nightmarish
Track Record Of Incompetence
The mainstream media portrays Federal Reserve Chairman Ben Bernanke as a brilliant economist, but is that really
2005, Bernanke said that we shouldn’t worry because housing prices had never declined on a nationwide basis
before and he said that he believed that the U.S. would continue to experience close to “full employment”….
“We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely
is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s
gonna drive the economy too far from its full employment path, though.”
In 2005, Bernanke also said that he believed that derivatives were perfectly safe and posed no
danger to financial markets….
“With respect to their safety, derivatives, for the most part, are traded among very sophisticated
financial institutions and individuals who have considerable incentive to understand them and to use them
In 2006, Bernanke said that housing prices would probably keep rising….
“Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in
activity will be moderate, that house prices will probably continue to rise.”
In 2007, Bernanke insisted that there was not a problem with subprime mortgages….
“At this juncture, however, the impact on the broader economy and financial markets of the problems in
the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate
mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”
In 2008, Bernanke said that a recession was not coming….
“The Federal Reserve is not currently forecasting a recession.”
A few months before Fannie Mae and Freddie Mac collapsed, Bernanke insisted that they
were totally secure….
“The GSEs are adequately capitalized. They are in no danger of failing.”
For many more examples that demonstrate the absolutely nightmarish track record of Federal Reserve Chairman Ben
Bernanke, please see the following articles….
But after being wrong over and over and over, Barack Obama still nominated Ben Bernanke for another term as
Chairman of the Fed.
#10 The Federal Reserve Has Become Way Too Powerful
The Federal Reserve is the most undemocratic institution in America.
The Federal Reserve has become so powerful that it is now known as “the fourth branch of government”, but there
are less checks and balances on the Fed than there are on the other three branches.
The Federal Reserve runs the U.S. economy but it is not accountable to the American people. We can’t vote those
that run the Fed out of office if we do not like what they do.
Yes, the president appoints those that run the Fed, but he also knows that if he does not tread lightly he won’t
get the money from the big Wall Street banks that he needs for his next election.
Thankfully, there are a few members of Congress that are complaining about how much power the Fed has. For
example, Ron Paul once told MSNBC that he believes that the Federal Reserve is now actually more powerful than
“The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve.
They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of
this. They’re more powerful than the Congress.”
As members of Congress such as Ron Paul have started to shed some light on the activities of the Federal
Reserve, that has caused many in the mainstream media to come to the defense of the Fed.
I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend
on that alone for the reduction of the administration of our government to the genuine principles of its
Constitution; I mean an additional article, taking from the federal government the power of borrowing.
Oh, how things would have been different if we had only listened to Thomas Jefferson.
Please share this article with as many people as you can. These are things that every American should know about
the Federal Reserve, and we need to educate the American people about the Fed while there is still time.
What is the Federal Reserve system? How did it come
into existence? Is it part of the federal government? How does it create money? Why is the public kept in the dark
about these important matters? In this feature-length documentary film, The Corbett Report explores these important
question and pulls back the curtain on America's central bank.
Click here to download an mp3
audio version of this documentary.
Click here to download an mp4
video version of this documentary.
All our lives we’ve been told that economics is boring. It’s dull. It’s not worth the time it takes to
understand it. And all our lives, we’ve been lied to.
War. Poverty. Revolution. They all hinge on economics. And economics all rests on one key concept: money.
Money. It is the economic water in which we live our lives. We even call it ‘currency’; it flows around us,
carries us in its wake. Drowns those who are not careful.
We use it every day in nearly every transaction we conduct. We spend our lives working for it, worrying about
it, saving it, spending it, pinching it. It defines our social status. It compromises our morals. People are
willing to fight, die and kill for it.
But what is it? Where does it come from? How is it created? Who controls it? It is a remarkable fact that, given
its central importance in our lives, not one person in a hundred could answer such basic questions about money
Interviewer: So if you were planning a family, you’d want to know where babies come
from. And this is a lot about banking. So let me ask you: where does money come from?
Interviewee 1: Where does the money come from? The government prints it. It’s printed
Interviewer: How is new money created?
Interviewee 2: By labor. People work and produce wealth, and the money is supposed to
match that wealth.
Interviewee: Where does money come from?
Interviewee 3: Well I have a pretty different outlook on money. It actually comes
from, like, trees, right?
But why is this? How could we be so ignorant about a topic of such importance? “Where does money come from?” is
a basic, childlike question. So why is our only response the childlike answer, meant as a joke: “It grows on
Such a profound state of ignorance could not come about naturally. From the time we are children, we are curious
about the world and eager to learn about the way it works. And what could lead to a better understanding of the way
the world works than a knowledge of money, its creation and destruction? Yet discussion of this topic is
fastidiously avoided in our school years and ignored in our daily life. Our monetary ignorance is artificial, a
smokescreen that has been erected on purpose and perpetrated with the help of complicated systems and insufferable
But it doesn’t take an economist to understand the importance of money. Deep down we all know that the wars, the
poverty, the violence we see around us hinges on this question of money. It seems like a thousand piece jigsaw
puzzle just waiting to be solved. And it is.
The puzzle pieces, taken together, create an image of the Federal Reserve, America’s central bank and the heart
of the country’s banking system. Despite its central importance to the economy, relatively few have heard of it,
and fewer still know what it is, despite the bank’s attempts at self-description:
Our economy runs on a complex system of exchange of goods and services in which money plays a key part.
Coin, currency, savings, and checking accounts; the overall supply of money is managed by the Federal Reserve.
Money is the medium through which economic exchanges take place, and money as a standard of value helps us to
set prices for goods and services. The job of managing money–monetary policy–is to preserve the purchasing
power of the dollar while ensuring that a sufficient amount of money is available to promote economic
The Federal Reserve also promotes the safety and soundness of the institutions where we do our banking. It
ensures that the mechanisms by which we make payments, whether by cash, cheque, or electronic means, operates
smoothly and efficiently.
And in its fiscal role acts as the banker for the United States government.
Now these duties comprise the major responsibilities of our central bank.
But in order to understand the Federal Reserve, we must first understand its origins and context. We must
deconstruct the puzzle.
The first piece of that puzzle lies here, in the White House. This is where the Federal Reserve Act, then known
as the Currency Bill, was signed into law after passing the House and Senate in late December, 1913.
“The Christmas spirit pervaded the gathering. While the ceremony was a little less impressive than that of the
signing of the Tarriff act on Oct. 3 last in the same room, the spectators were much more enthusiastic and seized
every occasion to applaud.”
There in the White House that fateful December evening, President Wilson signed away the last veneer of control
over the American money supply to a cartel; a well-organized gang of crooks so successful, so cunning, so
well-hidden that even now, a century later, few know of its existence, let alone the details of its operations. But
those details have been openly admitted for decades.
Of course, just as we have been taught to find economics boring, we have been taught that this story is boring.
This is the way the Federal Reserve itself tells it:
The United States was facing severe financial problems. At the turn of the century, most banks were issuing
their own currency called “bank notes.” The trouble was, currency that was good in one state was sometimes
worthless in another. People began to lose confidence in their money, since it was only as sound as the bank
that issued it. Fearful that their bank might go out of business, they rushed to exchange their bank notes for
gold or silver. By attempting to do so, they created the panic of 1907.
During the panic, people streamed to the banks and demanded their deposits. The banks could not meet the
demand; they simply did not have enough gold and silver coin available. Many banks went under. People lost
millions of dollars, businesses suffered, unemployment rose, and the stability of our economic system was again
Well, this couldn’t go on. If the country was going to grow and prosper, some means would have to be found
to achieve financial and economic stability.
To prevent financial panics like the one in 1907, President Woodrow Wilson signed The Federal Reserve Act
into law in 1913.
But this is history as told by the victors: a revisionist vision in which the creation of a central bank to
control the nation’s money supply is merely a boring historical footnote, about as important as the invention of
the zipper or an early 20th century hoola-hoop craze. The truth is that the story of the secret banking conclave
that gave birth to that Federal Reserve Act is as exciting and dramatic as any Hollywood screenplay or detective
novel yarn, and all the more remarkable for the fact that it is all true.
We pick up the story, appropriately enough, under cover of darkness. It was the night of November 22, 1910, and
a group of the richest and most powerful men in America were boarding a private rail car at an unassuming railroad
station in Hoboken, New Jersey. The car, waiting with shades drawn to keep onlookers from seeing inside, belonged
to Senator Nelson Aldrich, the father-in-law of billionaire heir to the Rockefeller dynasty, John D. Rockefeller,
Jr. A central figure on the influential Senate Finance Committee where he oversaw the nation’s monetary policy,
Aldrich was referred to in the press as the “General Manager of the Nation.” Joining him that evening was his
private secretary, Shelton, and a who’s who of the nation’s banking and financial elite: A. Piatt Andrew, the
Assistant Treasury Secretary; Frank Vanderlip, President of the National City Bank of New York; Henry P. Davison, a
senior partner of J.P. Morgan Company; Benjamin Strong, Jr., an associate of J.P. Morgan and President of Bankers
Trust Co., and Paul Warburg, heir of the Warburg banking family and son-in-law of Solomon Loeb of the famed New
York investment firm, Kuhn, Loeb & Company.
The men had been told to arrive one by one after sunset to attract as little attention as possible. Indeed,
secrecy was so important to their mission that the group did not use anything but their first names throughout the
journey so as to keep their true identities secret even from their own servants and wait staff. The movements of
any one of them would have been reason enough to attract the attention of New York’s voracious press, especially in
an era where banking and monetary reform was seen as a key issue for the future of the nation; a meeting of all of
them, now that would surely have been the story of the century. And it was.
Their destination? The secluded Jekyll Island off the coast of Georgia, home to the prestigious Jekyll Island
Club whose members included the Morgans, Rockefellers, Warburgs and Rothschilds. Their purpose? Davison told
intrepid local newspaper reporters who had caught wind of the meeting that they were going duck hunting. But in
reality, they were going to draft a reform of the nation’s banking industry in complete secrecy.
What happened is the banks decided that since there was going to be legislation anyway to control their
industry, that they wouldn’t just sit back and wait and see what happened and cross their fingers that it would
be OK. They decided to do what so many cartels do today: they decided to take the lead. And they would be the
ones calling for regulations and reform.
They like the word “reform.” The American people are suckers for the word “reform.” You just put that into
any corrupt piece of legislation, call it “reform” and people say “Oh, I’m all for ‘reform’,” and so they vote
for it or accept it.
So that’s what they were doing. They decided, “We will ‘reform’ our own industry.” In other words, “We will
create a cartel and we will give the cartel the power of government. We’ll take our cartel agreement so we can
self-regulate to our advantage and we’ll call it ‘The Federal Reserve Act.’ And then we’ll take this cartel
agreement to Washington and convince those idiots there to pass it into law.”
And that basically was the strategy. It was a brilliant strategy. Of course we see it happening all the
time, certainly in our own day today we see the same thing happened in other cartelized industries. Right now
we’re watching it unfold in the field of healthcare, but at that time it was banking, alright?
And so the banking cartel wrote their own rules and regulations, called it “The Federal Reserve Act,” got it
passed into law, and it was very much to their liking because they wrote it. And in essence what they had
created was a set of rules that made it possible for themselves to regulate their industry, but they went even
beyond that. In fact, it’s clear to me when I was reading their letters and their conversation at the time, and
the debates, that they never dreamed that Congress would go along and also give them the right to issue the
nation’s money supply. Not only were they now going to regulate their own industry, which is what they started
out as wanting to do, but they got this incredible gift that they didn’t dream would be given to them (although
they were negotiating for it), and that was that Congress gave them the authority to issue the nation’s money.
Congress gave away the sovereign right to issue the nation’s money to the private banks.
And so all of this was in The Federal Reserve Act, and the American people were joyous because they were
told, and they were convinced, that this was finally a means of controlling this big creature from Jekyll
Amazingly enough, they were successful, not just in conspiring to write the legislation that would eventually
become the Federal Reserve Act, but in keeping that conspiracy a secret from the public for decades. It was first
reported on in 1916 by Bertie Charles Forbes, the financial writer who would later go on to found Forbes magazine,
but it was never fully admitted until a full quarter century later when Frank Vanderlip wrote a casual admission of
the meeting in the February 9, 1935
edition of The Saturday Evening Post:
“I was as secretive—indeed, as furtive—as any conspirator.[…]I do not feel it is any exaggeration to speak of
our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the
Federal Reserve System.”
Over the course of their nine days of deliberation at the Jekyll Island club, they devised a plan so
overarching, so ambitious, that even they could scarcely imagine that it would ever be passed by congress. As
Vanderlip put it,
“Discovery [of our plan], we knew, simply must not happen, or else all our time and effort would be wasted. If
it were to be exposed publicly that our particular group had got together and written a banking bill, that bill
would have no chance whatever of passage by Congress.”
So what, precisely, did this conclave of conspirators devise at their Jekyll Island meeting? A plan for a
central banking system to be owned by the banks themselves, a system which would organize the nation’s banks into a
private cartel that would have sole control over the money supply itself. At the end of their nine day meeting, the
bankers and financiers went back to their respective offices content in what they had accomplished. The details of
the plan changed between its 1910 drafting and the eventual passage of the Federal Reserve Act, but the essential ideas were
But ultimately, this scene on Jekyll Island, too, is just one piece of a larger puzzle. And like any other
puzzle piece, it has to be seen in its wider context for the bigger picture to become visible. To understand the
other pieces of the puzzle and their importance in the creation of the Federal Reserve, we have to travel backward
The story begins in late 17th century Europe. The Nine Years’ War is raging across the continent as Louis XIV of
France finds himself pitted against much of the rest of the continent over his territorial and dynastic claims.
King William III of England, devastated by a stunning naval defeat, commits his court to rebuilding the English
navy. There’s only one problem: money. The government’s coffers have been exhausted by the waging of the war and
William’s credit is drying up.
A Scottish banker, William Paterson, has a banker’s solution: a proposal “to form a company to lend a million
pounds to the Government at six percent (plus 5,000 “management fee”) with the right of note issue.” By 1694 the
idea has been slightly revised (a 1.2 million pound loan at 8 percent plus 4000 for management expenses), but it
goes ahead: the magnanimously titled Bank of England is created.
The name is a carefully constructed lie, designed to make the bank appear to be a government entity. But it is
not. It is a private bank owned by private shareholders for their private profit with a charter from the king that
allows them to print the public’s money out of thin air and lend it to the crown. What happens here at the birth of
the Bank of England in 1694 is the creation of a template that will be repeated in country after country around the
world: a privately controlled central bank lending money to the government at interest, money that it prints out of
nothing. And the jewel in the crown for the international bankers that creates this system is the future economic
powerhouse of the world, the United States.
In many important respects, the history of the United States is the history of the struggle of the American
people against the bankers that wish to control their money. By the 1780s, with colonies still fighting for
independence from the crown, the bankers will get their wish.
In 1781 the United States is in financial turmoil. The Continental, the paper currency issued by the Continental
Congress to pay for the war, has collapsed from overissue and British
counterfeiting. Desperate to find a way to finance the end stages of the war, Congress turns to Robert Morris,
a wealthy shipping merchant who was investigated for war
profiteering just two years earlier. Now as “Superintendent of Finance” of the United States from 1781 to
1784 he is regarded as the most powerful man in America next to General Washington.
In his capacity as Superintendent of Finance, Morris argues for the creation of a privately-owned central bank
deliberately modeled on the Bank of England that the colonies were supposedly fighting against. Congress, backed
into a corner by war obligations and forced to do business with the bankers just like King William in the 1690s,
acquiesces and charters the Bank of North
America as the nation’s first central bank. And exactly as the Bank of England came into existence loaning
the British crown 1.2 million pounds, the B.N.A. started business by loaning $1.2 million to Congress.
By the end of the war, Morris has fallen out of political favor and the Bank of North America’s currency has
failed to win over a skeptical public. The B.N.A. is downgraded from a national central bank to a private
commercial bank chartered by the State of Pennsylvania.
But the bankers have not given up yet. Before the ink is even dry on the constitution, a group led by Alexander
Hamilton is already working on the next privately-owned central bank for the newly formed United States of
So brazen is Hamilton in the forwarding of this agenda that he makes no attempt to hide his aims or those of the banking
interests he serves:
“A national debt, if it is not excessive, will be to us a national blessing,” he wrote in a letter to James
Duane in 1781. “It will be a powerful cement of our Union. It will also create a necessity for keeping up taxation
to a degree which, without being oppressive, will be a spur to industry.”
Opposition to Hamilton and his debt-based system for establishing the finances of the US is fierce. Led by
Jefferson and Madison, the bankers and their system of debt-enslavement is called out for the force of destruction
that it is. As Thomas Jefferson wrote:
“[T]he spirit of war and indictment, […] since the modern theory of the perpetuation of debt, has drenched the
earth with blood, and crushed its inhabitants under burdens ever accumulating.”
Still, Hamilton proves victorious. The First Bank of the United States is chartered in 1791 and follows the
pattern of the Bank of England and the Bank of North America almost exactly; a privately-owned central bank with
the authority to loan money that it creates out of nothing to the government. In fact, it is the very same people
behind the new bank as were behind the old Bank of North America. It was Alexander Hamilton, Robert Morris’ former
aide, who first proposed Morris for the position of Financial Superintendent, and the director of the old Bank of
North America, Thomas Willing, is brought in to serve as the first director of the First Bank of the United States.
Meet the new banking bosses, same as the old banking bosses.
In the first five years of the banks’ existence, the US government borrows 8.2 million dollars from the bank and
prices rise 72%. By 1795, when Hamilton leaves office, the incoming Treasury Secretary announces that the
government needs even more money and sells off the government’s meager 20% share in the bank, making it a fully
private corporation. Once again, the US economy is plundered while the private banking cartel laughs all the way to
the bank that they created.
By the time the bank’s charter comes due for renewal in 1811, the tide has changed for the money interests
behind the bank. Hamilton is dead, shot to death in a duel with Aaron Burr. The bank-supporting Federalist party is
out of power. The public are wary of foreign ownership of the central bank, and what’s more don’t see the point of
a central bank in time of peace. Accordingly, the charter renewal is voted down in the Senate and the bank is
closed in 1811.
Less than a year later, the US is once again at war with England. After 2 years of bitter struggle the public
debt of the US has nearly tripled from $45.2
million to $119.2 million. With trade at a standstill, prices soaring, inflation rising and debt mounting,
President Madison signs the charter for the creation of another central bank, the Second Bank of the United States,
in 1816. Just like the two central banks before it, it is majority privately-owned and is granted the power to loan
money that it creates out of thin air to the government.
The 20 year bank charter is due to expire in 1836, but President Jackson has already vowed to let it die prior
to renewal. Believing that Jackson won’t risk his chance for reelection in 1832 on the issue, the bankers forward a
bill to renew the bank’s charter in July of that year, 4 years ahead of schedule. Remarkably, Jackson vetoes the
renewal charter and stakes his reelection on the people’s support of his move. In his veto message, Jackson writes in no uncertain terms about
his opposition to the bank:
“Whatever interest or influence, whether public or private, has given birth to this act, it can not be found
either in the wishes or necessities of the executive department, by which present action is deemed premature, and
the powers conferred upon its agent not only unnecessary, but dangerous to the Government and country. It is to be
regretted that the rich and powerful too often bend the acts of government to their selfish purposes.[…]If we can
not at once, in justice to interests vested under improvident legislation, make our Government what it ought to be,
we can at least take a stand against all new grants of monopolies and exclusive privileges, against any
prostitution of our Government to the advancement of the few at the expense of the many, and in favor of compromise
and gradual reform in our code of laws and system of political economy.”
The people side with Jackson and he’s reelected on the back of his slogan, “Jackson and No Bank!” The President
makes good on his pledge. In 1833 he announces that the government will stop using the bank and will pay off its
debt. The bankers retaliate in 1834 by staging a financial crisis and attempting to pin the blame on Jackson, but
it’s no use. On January 8, 1835, President Jackson succeeds in paying off the debt, and for the first and only time in its
history the United States is free from the debt chain of the bankers. In 1836 the Second Bank of the United States’
charter expires and the bank loses its status as America’s central bank.
It is 77 years before the bankers can regain the jewel in their crown. But it is not for lack of trying.
Immediately upon the death of the bank, the banking
oligarchs in England react by contracting trade, removing capital from the U.S., demanding payment in hard
currency for all exports, and tightening credit. This results in a financial crisis known as the Panic of 1837, and
once again Jackson’s campaign to kill the bank is blamed for the crisis.
Throughout the late 19th century the United States is rocked by banking panics brought about by wild banking
speculation and sharp contractions in credit. By the dawn of the 20th century, the bulk of the money in the
American economy has been centralized in the hands of a small clique of industrial magnates, each with a near
monopoly on a sector of the economy. There are the Astors in real estate, the Carnegies and the Schwabs in steel,
the Harrimans, Stanfords and Vanderbilts in railroads, the Mellons and the Rockefellers in oil. As all of these
families start to consolidate their fortunes, they gravitate naturally to the banking sector. And in this capacity,
they form a network of financial interests and institutions that centered largely around one man, banking scion and
increasingly America’s informal central banker in the absence of a central bank, John Pierpont Morgan.
John Pierpont Morgan, or “Pierpont” as he prefers to be called, is born in Hartford, Connecticut in 1837 to
Junius Spencer Morgan, a successful banker and financier. Morgan rides his father’s coattails into the banking
business and by 1871 is partnered in his own firm, the firm that was eventually to become J.P. Morgan and
It is Morgan who finances Cornelius Vanderbilt’s New York Central Railroad. It is Morgan that
finances the launch of nearly every major corporation of the period, from AT&T to General Electric to General
Motors to Dupont. It is Morgan who buys out Carnegie and creates the
United States Steel Corporation, America’s first billion dollar company. It is Morgan who brokers a deal with President Grover Cleveland to
“save” the nation’s gold reserves by selling 62 million dollars worth of gold to the Treasury in return for
government bonds. And it is Morgan, who, in 1907, sets in motion the crisis that leads to the creation of the
That year, Morgan begins
spreading rumors about the precarious finances of the Knickerbocker Trust Company, a Morgan competitor and one of the largest
financial institutions in the United States at the time. The resulting crisis, dubbed the Panic of 1907, shakes the
U.S. financial system to its core. Morgan puts himself forward as a hero, boldly offering to help underwrite some
of the faltering banks and brokerage houses to keep them from going under. After a bout of hand-wringing over the
nation’s finances, a Congressional Committee is
assembled to investigate the “money trust,” the bankers and financiers who brought the nation so close to financial
ruin and that wield such power over the nation’s finances. The public follows the issue closely, and in the end a
handful of bankers are identified as key players in the money trust’s operations, including Paul Warburg, Benjamin
Strong, Jr., and J.P. Morgan.
At the beginning of the 20th century there was an investigation following the greatest of these financial
panics, which was in 1907, and this investigation was on “the money trust.” It found that three banking
interests–J.P. Morgan, National City Bank, and the City Bank of New York–basically controlled the entire
financial system. Three banks. The public hatred toward these institutions was unprecedented. There was an
overwhelming consensus in the country for establishing a central bank, but there were many different interests
in pushing this and everyone had their own purpose behind advocating for a central bank.
So to represent most people, you had farmer interests, populists, progressives, who were advocating a
central bank because they couldn’t take the recurring panics, but they wanted government control of the central
bank. They wanted it to be exclusively under the public control because they despised and feared the New York
banks as wielding too much influence, so for them a central bank would be a way to curb the power of these
private financial interests.
On the other hand, those same financial interests were advocating for a central bank to serve as a source of
stability for their control of the system, and also to act as a lender of last resort to them so they would
never have to face collapse. But also, in order to exert more control through a central bank, the private New
York banking community wanted a central bank under the exclusive control of them. There’s a shocker.
So you had all these various interests which converged. Of course, the most influential happened to be the
New York financial houses which were more aligned with the European financial houses than they were with any
other element in American society. The main individual behind the founding of the Federal Reserve was Paul
Warburg, who was a partner with Kuhn, Loeb and Company, a European banking house. His brothers were prominent
bankers in Germany at that time, and he had of course close connections with every major financial and
industrial firm in the United States and most of those existing in Europe. And he was discussing all of these
ideas with his fellow compatriots in advocating for a central bank. In 1910, Warburg got the support of a
Senator named Nelson Aldrich, whose family later married into the Rockefeller family (again, I’m sure just a
coincidence). Aldrich invited Warburg and a number of other bankers to a private, secret meeting on Jekyll
Island just off the coast of Georgia where they met in 1910 to discuss the construction of a central bank in
the United States, but one which would of course be owned by and serve the interests of the private bank.
Aldrich then presented this in 1911 as the “Aldrich Plan” in the U.S. Congress, but it was actually voted
The public, suspicious of Senator Aldrich’s banking connections, ultimately reject the Jekyll Island cabal’s
“Aldrich Plan.” The cabal does not give up, however. They simply revise and rename their plan, giving it a new
public face, that of Representative Carter Glass and Senator Robert Owen.
In the end, the money trust that was behind the Panic of 1907 uses the public’s own outrage against them to
complete their consolidation of control over the banking system. The newly-retitled Federal Reserve Act is signed
into law on December 23, 1913 and the Fed begins operations the next year.
Part Two: How the Scam Works
“The study of money, above all other fields in economics, is one in which complexity is used to disguise
truth or to evade truth, not to reveal it.” -John Kenneth
So how does the Federal Reserve system work? What does it do? Who owns and controls it? These are the basic
questions that would get to the heart of the fundamental question: ‘what is money?’ And that is why the answer to
these questions have been shrouded in impenetrable economic jargon.
Even the Federal Reserve’s own educational propaganda, which has an unusual tendency toward cutesy animation and
talking down to its audience, has a difficult time summarizing the Fed’s mission and responsibilities. According to
To achieve [its] goals, the Fed, then and now, combines centralized national authority through the Board of
Governors with a healthy dose of regional independence through the reserve banks. A third entity, the Federal
Open Market Committee, brings together the first two in setting the nation’s monetary policy.
Precisely what imaginary gaggle of schoolchildren is this economic gibberish aimed at?
The simple truth, hidden behind the sleight of hand of economic jargon and magisterial titles, is that a banking
cartel has monopolized the most important item in our entire economy: money itself.
We are taught to think of money as the pieces of paper printed in government printing presses or coins minted by
government mints. While this is partially true, in this day and age the actual notes and coins circulating in the
economy represent only a tiny fraction of the money in existence. Over 90% of the money supply is in fact created
by private banks as loans that are payable back to the banks at interest.
Although this simple fact is obscured by the wizards of Wall Street and gods of money who want to make the money
creation process into some special art of alchemy carefully overseen by the government, the truth is not hidden
from the public.
In December 1977, the Federal Reserve Bank of New York published another of its dumbed-down cartoon-ridden
information pamphlets for the general public
attempting to explain the functions of the Federal Reserve System. There in black and white they carefully explain
the money creation process:
“Commercial banks create checkbook money whenever they grant a loan, simply by adding new deposit dollars to
accounts on their books in exchange for a borrower’s IOU.[...]Banks create money by ‘monetizing’ the private debts
of businesses and individuals. That is, they create amounts of money against the value of those IOUs.”
There it is, in plain English: the vast majority of money in the economy, the “checkbook” money in our accounts
at the bank and that we use in our electronic transfers and digital payments, is created not by a government
printing press, but by the bank itself. It is created out of thin air as debt, owed back to the bank that created
it at interest. This means that bank loans are not money taken from other bank depositors, but new money simply
conjured into existence and placed into your account. And the bank is able to create much more money than it has
cash to back up those deposits.
The Fed claims to be the entity overseeing and backing up the banking industry. It was established, according to
its own propaganda, to stabilize the system and prevent bank runs like the Panic of 1907 from happening again:
Throughout much of the 1800s, almost any organization that wanted could print its own money. As a result,
many states, banks, and even one New York druggist, did just that. In fact at one time there were over 30,000
different varieties of currency in circulation. Imagine the confusion.
Not only were there multitudes of currencies, some were redeemable in gold and silver, others were backed by
bonds issued by regional governments. It was not unusual for people to lose faith both in the value of their
currency and in the entire financial system. With many people trying to withdraw their deposits at once,
sometimes the banks didn’t have enough money on hand to pay their depositors. Then when the funds ran out the
banks suspended payment temporarily and some even closed. People lost their entire savings. Sometimes regional
Obviously something had to be done. And in 1913, something was. In that year, President Woodrow Wilson
signed into effect the Federal Reserve Act. This act created the Federal Reserve system to provide a safer and
more stable monetary and banking system.
If that was indeed its aim, it signally failed to do so in running up one of the greatest bubbles in American
history to that point in the 1920s, just a decade after its creation. The popping of that bubble, of course, lead
directly into the Great Depression and one of the greatest periods of mass poverty in American history. Economists
have long argued that the Fed itself was the cause of the depression by its complete mismanagement of the money
supply. As former Federal Reserve Chairman Ben Bernanke admitted in a speech commemorating Fed
critic Milton Friedman’s 90th birthday: “Regarding the Great Depression. You’re right, we did it. We’re very sorry.
But thanks to you, we won’t do it again.”
“Price stability” is another cited tenet of the Federal Reserve’s mandate. But here, too, the Fed has completely
failed to live up to its own standards:
Aside from the banking system, the Federal Reserve has another responsibility that’s probably even more
important. It’s in charge of something called “monetary policy.” Basically, it means trying to keep prices
stable to avoid inflation. Say you buy a CD today for $14. But what if next year the price of the CD jumped to
$20 or $50, not because of a change in supply or demand, but because all prices were going up. That’s
There are a lot of different causes of inflation, but one of the most important is too much money. The Fed
can adjust the money supply by injecting money into the system electronically, or by withdrawing money from the
Think of it: the Federal Reserve has the ability to create money, or make it disappear. What’s most
important is what happens as a result. Any time the supply of money is altered, the effects are felt throughout
The Fed’s methods have changed over time to take advantage of the latest computers and electronics, but its
mission remains the same: to aim for stable prices, full employment and a growing economy.
Paper money, too, is the responsibility of the Federal Reserve. Hence the dollars in circulation are not
Treasury notes, not bills of credit, but Federal Reserve Notes, debt-based notes backed up ultimately by the
government’s own promise to pay, its “sovereign bonds” secured by the taxpayers themselves. At one time, the
Federal Reserve Banks were legally required to keep large stockpiles of gold in reserve to back up these notes, but
that requirement was abandoned and today the notes are backed up mostly by government securities. The Fed
no longer keeps any
actual gold on its books, but gold “certificates” issued by the treasury and valued not at the spot
price of $1300 per troy ounce, but an arbitrarily fixed “statutory price” of $42 2/9 per ounce.
Ron Paul: But I do have one question: During the crisis or at any time that you’re aware
of, has the Federal Reserve or the Treasury participated in any gold swap arrangements?
Scott Alvarez: The Federal Reserve does not own any gold at all. We have not owned gold
since 1934 so we have not engaged in any gold swaps.
Ron Paul: But it appears on your balance sheet that you hold gold.
Scott Alvarez: What appears on our balance sheet is gold certificates. When we turned
in…before 1934, we did…the Federal Reserve did own gold. We turned that over by law to the Treasury and
received in return for that gold certificates.
Ron Paul: If the Treasury entered into…because under the Exchange Stabilization Fund I
would assume they probably have the legal authority to do it…they wouldn’t be able to do it then because you
have the securities for essentially all the gold?
Scott Alvarez: No, we have no interest in the gold that is owned by the Treasury. We have
simply an accounting document that is called “gold certificates” that represents the value at a statutory rate
that we gave to the Treasury in 1934.
Ron Paul: And still measured at $42 an ounce which makes no sense whatsoever.
Clearly, there is a discrepancy between what we are led to believe is motivating the Fed and what it actually
does. To understand what the Fed is actually intended to do, it’s first important to understand that the Federal
Reserve is not a bank, per se, but a system. This system codifies, institutionalizes, oversees and undergirds a
form of banking called fractional reserve banking, in which banks are allowed to lend out more money than they
actually have in their vaults.
The process of decay and corruption starts with something called “fractional reserve banking.” That’s the
technical name for it. And what that really means is that as the banking institution developed over several
centuries, starting of course in Europe, it developed a practice of legalizing a certain dishonest accounting
In other words, in the very, very beginning (if you want to go all the way back), people would bring their
gold or silver to the banks for safe keeping. And they said, “give us a paper receipt, we don’t want to guard
our silver and our gold because people could come in in the middle of the night and they could kill us or
threaten us and they’ll get our gold and silver so we can ‘t really guard it so we’ll take it to the bank and
have them guard it and we just want a paper receipt. And we’ll take our receipt back and get our gold anytime
we want.” So in the beginning money was receipt money. Then, instead of changing or exchanging the gold coins,
they could exchange the receipts, and people would accept the receipts just as well as the gold, knowing that
they could get gold. And so these paper receipts being circulated were in essence the very first examples of
Well the banks learned early on in that game that here they were sitting on this pile of gold and all these
paper receipts out there. People weren’t bringing in the receipts anymore, very few of them, maybe five percent
maybe seven percent of the people would bring in their paper receipts and ask for the gold. So they said, “Ah
ha! Why don’t we just sort of give more receipts out then we have gold? They’ll never know because they only
ask for, at the best, seven percent of it. So we can create more receipts for gold then we have. And we can
collect interest on that because we’ll loan that into the economy. We’ll charge interest on this money that we
don’t really have. And it’s a pretty good gimmick don’t ya think?” And they go, “Well, yeah, of course.” And so
that’s how fractional reserve banking started.
And now it’s institutionalized and they teach it in school. No one ever questions the integrity of it or the
ethics of it. They say, “Well, that’s the way banking works, and isn’t it wonderful that we now have this
flexible currency and we have prosperity” and all these sorts of things. So it all starts with this concept of
fractional reserve banking.
The trouble with that is that it works most of the time. But every once and a while there are a few ripples
that come along that are a little bit bigger than the other ripples. Maybe one of them is a wave. And more than
seven percent will come in and ask for their gold. Maybe twenty percent or thirty percent. And well, now the
banks are embarrassed because the fraud is exposed. They say, “well we don’t have your gold” “What do you mean
you don’t have my gold!! I gave it to you and put it on deposit and you said you’d safe guard it.” “Well we
don’t have it, we loaned it out.” So then the word gets out and everyone and their uncle comes out and lines up
for their gold. And of course they don’t have it, the banks are closed, and they have bank holidays. Banks are
embarrassed, people lose their savings. You have these terrible banking crashes that were ricocheting all over
the world prior to this time. And that is what caused the concern of the American people. They didn’t want that
anymore. They wanted to put a stop to that.
And that was the whole purpose, supposedly, of the Federal Reserve system. Was to put a stop to that. But
since the people who designed the plan to put a stop to it were the very ones who were doing it in the first
place, you can not be surprised that their solution was not a very good one so far as the American people were
concerned. Their solution was to expand it. Not to control it, to expand it. See, prior to that time, this
little game of fractional reserve banking was localized at the state level. Each state was doing its own little
fractional reserve banking system. Each state, in essence, had its own Federal Reserve. Central banks were
authorized by state law to do this sort of thing. And that was causing all this problem. So the Federal Reserve
came along and said, “No no, we’re not going to do this at the state level anymore, because look at all the
problem it’s causing. We’re going to consolidate it all together and we’re going to do it at the national
The key to the system, of course, is who controls this incredible power to “regulate” the economy by setting
reserve requirements and targeting interest rates. The answer to this question, too, has been deliberately
The Federal Reserve system is a deliberately confusing mish-mash of public and private interests, reserve banks,
boards and committees, centralized in Washington and spread out across the United States.
So you have the Federal Reserve Board in Washington appointed by the President. That’s the only part of this
system that is directly dependent on the government for input that’s the “federal” part: that the
government–the president specifically–gets to choose a few select governors. The twelve regional banks–the most
influential of which is the Federal Reserve Bank of New York which is essentially based in Wall Street to
represent Wall Street–is a representative of the major Wall Street banks who own shares in the private, not
federal, but private Federal Reserve Bank of New York. All of the other regional banks are also private banks.
They vary according to how much influence they wield but the Kansas City fed is influential, the St. Louis fed,
the Dallas fed, but the New York Fed is really the center of this system and precisely because it represents
the Wall Street banks who appoint the leadership of the New York fed.
So the New York fed has a lot of public power, but no public accountability or oversight. It does not answer
to Congress the way that the chairman of the Federal Reserve Board of Governors does and even the chairman of
the Federal Reserve board who is appointed by the President, does not answer to the President, does not answer
to Congress. He goes to Congress to testify but the policy that they set is independent. So they have no input
from the government. The government can’t tell them what to do legally speaking, and of course they don’t.
Rep. John Duncan: Do you think it would cause problems for the Fed or for the economy
if that legislation was to pass?
Ben Bernanke: My concern about the legislation is that if the GAO is auditing not only
the operational aspects of our programs and the details of the programs, but is making judgements about our
policy decisions, that would effectively be a takeover of monetary policy by the Congress, a repudiation of
the independence of the Federal Reserve which would be highly destructive to the stability of the financial
system, the dollar, and our national economic situation.
The Federal Open Market Committee is responsible for setting interest rates. Now this committee, which is
enormously powerful, has as its membership the Governor and Vice Chair of the Federal Reserve Board, but on the
Federal Open Market Committee most of the membership is the presidents of the regional Federal Reserve Banks
representing private interests. So they have significant input into setting the interest rates. Interest rates
are not set by a public body, they’re set by private financial and corporate interests. And that’s whose
interests they serve, of course.
The reason that the Federal Reserve goes to such great lengths to make its organizational structure as confusing
as possible is to cover up the massive conflicts of interest that are at the heart of that system. The fact is that
the Federal Reserve system is comprised of a Board of Governors, 12 regional banks, and an open market committee.
The privately-owned member banks of each Federal Reserve Bank vote on the majority of the Reserve Bank’s directors,
and the directors vote on members to serve on the Federal Open Market Committee which determines monetary policy.
What’s more, Wall Street is given a prime seat at the table, with tradition holding that the President of the
powerful New York Federal Reserve Bank be given the Vice Chairmanship of the FOMC and be made a permanent committee
member. In effect, the private banks are the key determinants in the composition of the FOMC which regulates the
According to the Fed “its monetary policy
decisions do not have to be approved by the President or anyone else in the executive or legislative branches of
government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of
Governors span multiple presidential and congressional terms.”
Or, in the words of Alan Greenspan: “The Federal
Reserve is an independent agency and that means there is no other agency of government that can overrule actions
that we take.”
The Fed goes on in its self-mythologization to state that it is “not a private, profit-making institution.” This
characterization is dishonest at best, and an outright lie at worst.
The regional banks are themselves private corporations, as noted in a 1928 Supreme Court ruling: “Instrumentalities like the national banks or the
federal reserve banks, in which there are private interests, are not departments of the government. They are
private corporations in which the government has an interest.” This point is even admitted by the Federal Reserve’s
own senior counsel.
Yvonne Mizusawa: Our regulations do specify overall terms for the lending, but the day
to day operation of the banking activities are conducted by the Federal Reserve Banks. They are banks, and
indeed they do lend…
Peter W. Hall: So they’re their own agency, then, essentially, in that regard.
Yvonne Mizusawa: They are not agencies, your honor, they are “persons” under FOIA. Each
Federal Reserve Bank, the stock is owned by the member banks in the district, 100% privately held, they are
private boards of directors. The majority of those boards are appointed by the independent banks, private banks
in the district. They are not agencies.
These private corporations issue shares that are held by the member banks that make up the system, making the
banks the ultimate owners of the Federal Reserve Banks. Although the Fed’s profits are returned to the Treasury
each year, the member banks’ shares of the Fed do earn them a 6%
dividend. According to the Fed, the fixed nature of these returns mean that they are not being held for
Despite the dishonest nature of this description, however, it is important to understand that the bankers who
own the Federal Reserve indeed do not make their money from the Fed directly. Instead, the benefits are much less
obvious, and much more insidious. The simplest way that this can be understood is that, as a century of history and
the specific example of the last financial crisis shows, the Fed was used as a vehicle to bail out the very bankers
who own the Fed banks in the most obvious example of fascistic collusion imaginable.
A handful of financial institutions have enriched themselves as a result of institutional speculation on a
large scale, as well as manipulation of the market. And secondly what they have done is that they have then
gone to their governments and said, “Well, we are now in a very difficult situation and you need to lend us…you
need to give us money so that we can retain the stability of the financial system.”
And who actually lends the money, or brokers the public debt? The same financial institutions that are the
recipients of the bailout. And so what you have is a circular process. It’s a diabolical process. You’re
lending money…no, you’re not lending money, you’re handing money to the large financial instutions, and then
this is leading up to mounting public debt in the trillions. And then you say to the financial institutions “We
need to establish a new set of treasury bills and government bonds, etc.” which of course are sold to the
public, but they are always brokered through the financial institutions which establish their viability and so
on and so forth. And the financial institutions will probably buy part of this public debt so that in effect
what the government is doing is financing its own indebtedness through the bailouts. It hands money to the
banks, but to hand money to the banks, it becomes indebted to those same financial institutions, and then it
says “We now have to emit large amounts of public debt. Please can you help us?” And then the banks will say:
“Well, your books are not quite in order.” And then the government will say: “Obviously they’re not in order
because we’ve just handed you 1.4 trillion dollars of bailout money and we’re now in a very difficult
situation. So we need to borrow money from the people who are in fact the recipients of the bailout.”
So this is really what we’re dealing with. We’re dealing with a circular process.
The 2008 crisis and subsequent bailouts are merely the latest and most brazen examples of the fundamental
conflicts of interest at the heart of America’s privately-owned central banking system.
Beginning with the collapse of Lehman Bros. in September of that year, the Federal Reserve embarked on an
unprecedented program of bailouts and special zero interest lending facilities for the very banks that had caused
the subprime meltdown in the first place. By the cartelization of the Federal Reserve structure, and thus not by
accident, it was the very bank presidents who had overseen their banks’ lending practices that ended up in the
director positions of the Federal Reserve Banks that voted on where to direct the trillions of dollars in bailout
money. And unsurprisingly, they directed it toward their own banks.
A stunning 2011 Government
Accountability Office report examined $16 trillion of bailout facilities extended by the Fed in the wake
of the crisis and exposed numerous examples of blatant
conflicts of interest. Jeffrey Immelt, chief executive of General Electric served as a director on the board of
the Federal Reserve Bank of New York at the same time the Fed provided $16 billion in financing to General
Electric. JP Morgan Chase chief executive, Jamie Dimon, meanwhile, was also a member of the board of the New York
Fed during the period that saw $391 billion in Fed emergency lending directed to his own bank. In all, Federal
Reserve board members were tied to $4 trillion in loans to their own banks. These funds were not simply used to
keep these banks afloat, but actually to return these Fed-connected banks to a period of record profits in the same
period that the average worker saw their real wages actually decrease and the economy on main street slow to a
Then Fed Chairman Ben Bernanke was confronted about these conflicts of interest by Senator
Bernie Sanders upon the release of the GAO report in June 2012.
Ben Bernanke: Senator, you raised an important point, which is that this is not something
the Federal Reserve created. This is in the statute. Congress in the Federal Reserve Act said “This is the
governance of the Federal Reserve.” And more specifically that bankers would be on the board…
Bernie Sanders: 6 out of 9.
Ben Bernanke: Sorry?
Bernie Sanders: 6 out of 9 in the regional banks are from the banking industry.
Ben Bernanke: That’s correct. And that is in the law. I’ll answer your question, though.
The answer to your question is that Congress set this up, I think we’ve made it into something useful and
valuable. We do get information from it. But if Congress wants to change it, of course we will work with you to
Bernanke is completely right. These conflicts are in fact a part of the institution itself. A structural feature
of the Federal Reserve that was baked into the Federal Reserve Act itself over 100 years ago by the bankers who
conspired to cartelize the nation’s money supply. You could not ask for a more succinct reason why the Federal
Reserve itself, this admitted cartel of banking interests, needs to be abolished…but you could get one.
Part Three: End the Fed
“They who control the credit of a nation, direct the policy of Governments and hold in the hollow of their
hands the destiny of the people.” – Reginald
We now know that for centuries the people of the United States have been at war with the international banking
oligarchs. That war was lost, seemingly for good, in 1913, with the creation of the Federal Reserve. With the
passage of the Federal Reserve Act, President Woodrow Wilson consigned the American population to a century in
which the money supply itself has depended on the whims of the banking cabal. A century of booms and busts, bubbles
and depressions, has led to a wholesale redistribution of wealth toward those at the very top of the system. At the
bottom, the masses toil in relative poverty, single-income households becoming double-income households out of
necessity, their quality of life being slowly eroded as the Federal Reserve Notes that pass for dollars are
Worse yet, the fraud itself perpetuates Alexander Hamilton’s persistent myth that a national debt is necessary
at all. The US is now locked into a system whereby the government issues bonds to generate the funds for their
operations, bonds that are backed up by the taxation of the public’s own labor.
The perpetrators of this fraud, meanwhile, remain in the shadows, largely ignored by a general public that could
instantly recognise the latest Hollywood heartthrob or pop idol, but have no clue what the head of Goldman Sachs or
the New York Fed does, let alone who they are. This cabal bear allegiance to no nationality, no philosophy or
creed, no code of ethics. They are not even motivated by greed, but power. The power that the control of the money
supply inevitably brings with it.
It did not take long for this lust for power to rear its head. In 1921, just 7 years after the Fed began
operations, the same J.P. Morgan-connected banking elite that founded the Federal Reserve incorporated an
organization called The Council on Foreign Relations with the goal of taking over the foreign policy apparatus
of the United States, including the State Department. In this quest, it was remarkably successful. Although
there are only about 4000 members in the organization today, its membership has included 21 Secretaries of
Defense, 18 Treasury Secretaries, 18 Secretaries of State, 16 CIA directors and many other high-ranking
government officials, military officers, business elite, and, of course, bankers. The first Director of the CFR
was John W. Davis, J.P. Morgan’s personal lawyer and a millionaire in his own right.
Together with its sister organizations in Britain and elsewhere around the world, these groups would work
together toward what they called a “New World Order” of total financial and political control directed by the
bankers themselves. As Carroll Quigley, noted Georgetown historian and mentor of Bill Clinton, wrote in his 1966 work, Tragedy and Hope: A History of
The World In Our Time:
“The powers of financial capitalism had [a] 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. The apex of the system
was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the
world’s central banks which were themselves private corporations.”
This is why the bankers and their partners in government and business conspired to bring about the 2008 crisis.
Not for the pursuit of money, but power. In the same way the bankers used the Panic of 1907 to consolidate their
control over the money supply, they hope to use the 2008 crisis and subsequent panics, which they themselves have
created, to consolidate their political control.
The inevitable conclusion, one that flows necessarily from the true understanding of this situation, is that the
Federal Reserve system needs to be consigned to the dustbin of history. After a century of enslavement, it is time
for the American public to finally throw off the bankers’ debt chains.
If you’ve made it this far, congratulations. You are now better informed on the economic history of the United
States and the truth about the Federal Reserve than 99% of the population. If you do nothing else, then just
working to get those around you educated on this information alone will have a profound effect. Once they learn of
the scam, many are motivated to do something about it, and they, in turn, inform others. This is the viral nature
of suppressed truth, and it is the reason that more people are aware of and energized by the issue of the Federal
Reserve and the nature of money than ever before.
Perhaps even more amazingly, this movement is spreading to other parts of the globe. Recognizing the
interlocking nature of the modern global economy, and the international nature of the banking oligarchy, movements
to abolish the Federal Reserve have sprung up in Europe,
where protests against the cartelized central banking system are taking place in over 100 cities attracting 20,000
people on a weekly basis.
Lars Maehrholz: I started this movement because I realized that the Federal Reserve
Act, in my opinion, is one of the worst laws in the whole world. So a private banking company is lending
America the money, and in my opinion is not democratic anymore. The Federal Reserve tells the government what
to do, and that’s the problem.
Luke Rudkowski: It’s a very big problem, especially in the U.S. Why is it a global
issue, and why are people doing it here in Germany?
Lars Maehrholz: Because when you realize that this finance system, it’s a global system,
you have to go really to the beginning of the system. And in my opinion it’s also the World Bank and the
International Monetary Fund and stuff like this, but at the beginning of all this is a law from 1913. Woodrow
Wilson signed it, and this is the beginning of all this hardcore capitalism we are now suffering from. And the
only way to stop this is maybe to break this law.
But what if the burgeoning movement to End The Fed is successful? What system do people propose as the answer?
There have been several proposals along different lines by various researchers. Some argue for a return to America’s colonial roots of
debt-free money issued by state run banks, pointing to the Bank of North Dakota as one already functioning,
successful model of this approach.
Others advocate a
decentralized system of alternative and competing currencies that greatly reduce or even eliminate altogether the
need for a central bank.
Some argue for currencies whose mathematical
nature prevent them from being merely conjured into existence whenever a federal government wants to wage another
war of aggression or forge another link in the seemingly endless train of governmental tyranny and abuse.
Other, even more innovative ideas have been forwarded to harness current technologies to bring credit creation
back to the individual level and revolutionize our concept of money altogether:
Sound money. Cryptocurrencies. State banks. LETS programs. Self-issued credit. These and many other solutions
have all been proposed and many of them are in use in different localities today. Information on all of these ideas
and how they are being applied in various parts of the world are widely available online today. The point is that
the question of what money is and how it should be created is perhaps the single greatest question facing humanity
as a whole, and yet it is one that has been almost completely eliminated from the national conversation…until
For the first time in living memory, people are once again rallying around the monetary issue, and American
politics stands on the threshold of a transformation almost unimaginable just two decades ago.
And so the rest of the story is now in our hands. Once we understand the scam that has taken place, the gradual
consolidation of wealth and power in the hands of an elite few banking oligarchs and the growing impoverishment of
the masses, all in the name of banking funny money created out of nothing and loaned to the public at interest, we
can choose to get active or to do nothing at all.
For those who choose to get active, there are some steps that you can take to help change the course of this
1) Follow the links and resources from the transcript of this documentary at corbettreport.com/federalreserve to familiarize yourself with the
history, the connections and the functions of the Federal Reserve system. If you can’t explain this material to
yourself then you will never be able to teach it to others.
2) Begin reaching out to others to bring them up to speed on the issue. It can be as simple as broaching this
conversation in the Monday morning water cooler talk or passing out a copy of this documentary or sending out links
to this information to your email list. Insert this topic into your conversations. When people start talking about
the national debt or the state of the economy or other political talking points, get them to question the roots of
these issues, and why there is a national debt at all.
3) When you are able to find or create a group of like-minded people in your area who are engaged with the
issue, start a study group on the issue and its solutions. The study group can help source alternative or
complementary currencies in the local area, or, if none exist already, the group can form the basis for a community
of local businesses and customers who are willing to start experimenting with ways to wean themselves off of the
Federal Reserve notes.
4) Use the resources at corbettreport.com, including the Federal Reserve information flyer, or hold DVD
screenings, to attract interest in your group and draw others into studying the true nature of the monetary
The work of building up an alternative to the current system can seem daunting, even at times overwhelming. But
it’s important to keep in mind that the Federal Reserve system that seems so monolithic today has only been around
for one century. Central banks have been defeated in America before and they can be defeated again.
The question of how we decide to change this system is not rhetorical; it will either be answered by an
informed, engaged, active population working together to create viable alternatives and to dismantle the current
system, or it will be answered by the same banking oligarchy that has been controlling the money supply, and indeed
the lifeblood of the country, for generations.
Now, one century after the creation of the Federal Reserve system, we have a choice to make: whether the next
century, like the one before it, will be a century of enslavement, or, transformed by the actions and choices that
we make in the light of this knowledge, a century of empowerment.
Washington is owned by the private global
banking cartel that owns Wall Street. International law does not apply to this criminal cartel. They stole
trillions of dollars from the American people with help from corrupt politicians over a stretch of many decades,
culminating in the government bailout in 2008, and they have not been held accountable.
These bandits and looters could care less if America crashes and burns. In fact,
they want America to die because they want to institute a private world government upon its ruins. And they’re
doing a fantastic job at it because they’ve had decades of practice in nations in Latin America, Africa, and
Asia where they bought off greedy politicians, and robbed their people through the IMF/World Bank/WTO.
The entire business model of the private global banking tricksters is based on stealing the wealth
of nations, and destroying national independence in order to allow lawless multinational corporations to completely
take over. Read this article about how they do it.
Once nations are put into needless debt by these private global bankers, they put the squeeze on
them by forcing them to pay back usurious loans that make them go bankrupt. After the inevitable mayhem that
follows national collapse, they impose a military dictatorship so that the people can’t resist. Damon Vrabel calls
it the “death of nations.” He writes:
The fact is that most countries are not sovereign (the few that are are being attacked by
CIA/MI6/Mossad or the military). Instead they are administrative districts or customers of the global banking
establishment whose power has grown steadily over time based on the math of the bond market, currently ruled by the
US dollar, and the expansionary nature of fractional lending. Their cult of economists from places like Harvard,
Chicago, and the London School have steadily eroded national sovereignty by forcing debt-based, floating currencies
Civilized nations stand up for themselves,
they don’t bow down to private bankers. America can prove to the world that it is civilized, honest, and free by
showing the global banking overlords the door.
The way to fight back against the global robbers at the privately owned Federal Reserve
Bank/IMF/World Bank and the big banks is entirely peaceful. It is a matter of exposing their deviance and deception
to the public, and then hitting the streets. An enemy can’t be defeated unless it remains in the shadows, striking
at will. Directing public light at the private global banking cartel’s evil influence over nations that are thought
to be free and independent by the people is the only way to bring an end to their crimes, and treachery against
A new civilization based on the divine values of freedom, justice, truth, and mutual respect among
nations, and private institutions, can’t be born unless we all come together as global citizens and fight back
against the unlawful rule of the private global banking cartel. Our countries are suffering because of their greed
and ruthless control.
The austerity measures that are being called for by the banks and the elite is bringing chaos onto
the streets of Europe on a scale never before seen, and it won’t be long before America enters the stage. We are
nearing the moment when the globalist conspirators behind the plans for a new world order will openly declare the
end of America. When they do, we shall declare the end of them, and fight for the rebirth of America, and all of
Only an order based on the rule of law and freedom should be accepted. The conspiratorial elite
intend to achieve a new world order through this period of engineered chaos not by law, but by brutal force because
it is the only way to impose a criminal, bank-owned government on a global scale. Despite their rhetoric, these
devilish traitors are not visionary thinkers because corrupt designs for a world state isn’t new in history. Their
arrogance is a cover. They will fail hard. And America will be set free from bondage, along with other nations.
“This is global government, a private corporate global government, taking over every major society
with the same formula. It is fraudulent, and it must be resisted, or we have no future. We cannot allow this new
dark age to begin,” says radio host Alex Jones in a YouTube video message entitled “It’s the Bankers or Us.” Watch
his message, and spread it.
There is a peaceful global revolution against the private global banking cartel, and it can’t be
stopped. Join it and help everyone live free, or die a slave under the empire of debt.
DERIVATIVES : The Debt
The derivatives market is the Las Vegas of the world's financial
super elite, worth anywhere between 2 to 8 quadrillion dollars compared to about 70 trillion dollars of world
GDP. We look at the so-called financial innovations of Wall Street from Collateralized Debt Obligations to
Mortgage Backed Securities.
We also look at US government's complicity; White House and Congress both vested
interests not only as recipients of Wall Street largess in the form of campaign donations but as major players with
criminal asymmetrical information and influence advantages.
"I freed a thousand slaves; I
could have freed a thousand more, if only they knew they were slaves."
Only the vigilant can maintain their liberties, and only those who
are constantly and intelligently on the spot can hope to govern themselves effectively by democratic
"A society, most of whose members spend a great part of their time,
not on the spot, not here and now and in their calculable future, but somewhere else, in the irrelevant other
worlds of sport and soap opera, of mythology and metaphysical fantasy, will find it hard to resist the
encroachments of those who would manipulate and control it.”