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Title: The Libor Scandal In Full Perspective by Dr. Paul Craig Roberts
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Published: Jul 24, 2012
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Post Date: 2012-07-24 15:51:46 by tom007
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The Libor Scandal In Full Perspective by Dr. Paul Craig Roberts Global Research, July 20, 2012 paulcraigroberts.com Email this article to a friend Print this article Share The article about the Libor scandal, coauthored with Nomi Prins, received much attention, with Internet repostings, foreign translation, and video interviews. To further clarify the situation, this article brings to the forefront implications that might not be obvious to those without insider experience and knowledge. The price of Treasury bonds is supported by the Federal Reserve’s large purchases. The Federal Reserve’s purchases are often misread as demand arising from a “flight to quality” due to concern about the EU sovereign debt problem and possible failure of the euro. Another rationale used to explain the demand for Treasuries despite their negative yield is the “flight to safety.” A 2% yield on a Treasury bond is less of a negative interest rate than the yield of a few basis points on a bank CD, and the US government, unlike banks, can use its central bank to print the money to pay off its debts. It is possible that some investors purchase Treasuries for these reasons. However, the “safety” and “flight to quality” explanations could not exist if interest rates were rising or were expected to rise. The Federal Reserve prevents the rise in interest rates and decline in bond prices, which normally result from continually issuing new debt in enormous quantities at negative interest rates, by announcing that it has a low interest rate policy and will purchase bonds to keep bond prices high. Without this Fed policy, there could be no flight to safety or quality. It is the prospect of ever lower interest rates that causes investors to purchase bonds that do not pay a real rate of interest. Bond purchasers make up for the negative interest rate by the rise in price in the bonds caused by the next round of low interest rates. As the Federal Reserve and the banks drive down the interest rate, the issued bonds rise in value, and their purchasers enjoy capital gains. As the Federal Reserve and the Bank of England are themselves fixing interest rates at historic lows in order to mask the insolvency of their respective banking systems, they naturally do not object that the banks themselves contribute to the success of this policy by fixing the LIbor rate and by selling massive amounts of interest rate swaps, a way of shorting interest rates and driving them down or preventing them from rising. The lower is Libor, the higher is the price or evaluations of floating-rate debt instruments, such as CDOs, and thus the stronger the banks’ balance sheets appear. Does this mean that the US and UK financial systems can only be kept afloat by fraud that harms purchasers of interest rate swaps, which include municipalities advised by sellers of interest rate swaps, and those with saving accounts? The answer is yes, but the Libor scandal is only a small part of the interest rate rigging scandal. The Federal Reserve itself has been rigging interest rates. How else could debt issued in profusion be bearing negative interest rates? As villainous as they might be, Barclays bank chief executive Bob Diamond, Jamie Dimon of JP Morgan, and Lloyd Blankfein of Goldman Sachs are not the main villains. The main villains are former Treasury Secretary and Goldman Sachs chairman Robert Rubin, who pushed Congress for the repeal of the Glass-Steagall Act, and the sponsors of the Gramm-Leach-Bliley bill, which repealed the Glass-Steagall Act. Glass-Steagall was put in place in 1933 in order to prevent the kind of financial excesses that produced the current ongoing financial crisis. President Clinton’s Treasury Secretary, Robert Rubin, presented the removal of all constraints on financial chicanery as “financial modernization.” Taking restraints off of banks was part of the hubristic response to “the end of history.” Capitalism had won the struggle with socialism and communism. Vindicated capitalism no longer needed its concessions to social welfare and regulation that capitalism used in order to compete with socialism. The constraints on capitalism could now be thrown off, because markets were self-regulating as Federal Reserve chairman Alan Greenspan, among many, declared. It was financial deregulation–the repeal of Glass-Steagall, the removal of limits on debt leverage, the absence of regulation of OTC derivatives, the removal of limits on speculative positions in future markets–that caused the ongoing financial crisis. No doubt but that JP Morgan, Goldman Sachs and others were after maximum profits by hook or crook, but their opportunity came from the neoconservative triumphalism of “democratic capitalism’s” historical victory over alternative socio-politico-economic systems. The ongoing crisis cannot be addressed without restoring the laws and regulations that were repealed and discarded. But putting Humpty-Dumpty back together again is an enormous task full of its own perils. The financial concentration that deregulation fostered has left us with broken financial institutions that are too big to fail. To understand the fullness of the problem, consider the law suits that are expected to be filed against the banks that fixed the Libor rate by those who were harmed by the fraud. Some are saying that as the fraud was known by the central banks and not reported, that the Federal Reserve and the Bank of England should be indicted for their participation in the fraud. What follows is not an apology for fraud. It merely describes consequences of holding those responsible accountable. Imagine the Federal reserve called before Congress or the Department of Justice to answer why it did not report on the fraud perpetrated by private banks, fraud that was supporting the Federal Reserve’s own rigging of interest rates (and the same in the UK.) The Federal reserve will reply: “So, you want us to let interest rates go up? Are you prepared to come up with the money to bail out the FDIC-insured depositors of JPMorganChase, Bank of America, Citibank, Wells Fargo, etc.? Are you prepared for US Treasury prices to collapse, wiping out bond funds and the remaining wealth in the US and driving up interest rates, making the interest rate on new federal debt necessary to finance the huge budget deficits impossible to pay, and finishing off what is left of the real estate market? Are you prepared to take responsibility, you who deregulated the financial system, for this economic armageddon? Obviously, the politicians will say NO, continue with the fraud. The harm to people from collapse far exceeds the harm in lost interest from fixing the low interest rates in order to forestall collapse. The Federal Reserve will say that we are doing our best to create profits for the banks that will permit us eventually to unwind the fraud and return to normal. Congress will see no better alternative to this. But the question remains: How long can the regime of negative interest rates continue while debt explodes upward? Currently, everyone in the US who counts and most who don’t have an interest in holding off armageddon. No one wants to tip over the boat. If the banks are sued for damages and lack the money to pay, the Federal Reserve can create the money for the banks to pay. If the collapse of the system does not result from scandals, it will come from outside. The dollar is the world reserve currency. This means that the dollar’s exchange value is boosted, despite the dismal economic outlook in the US, by the fact that, as the currency for settling international accounts, there is international demand for the dollar. Country A settles its trade deficit with country B in dollars; country B settles its account with country C in dollars; and so on throughout the countries of the world. For whatever the reason–perhaps to curtail their accumulation of suspect dollars or to bring Washington’s power to an end–the BRICS countries, Brazil, Russia, India, China, and South Africa, are agreeing to settle their trade between themselves in their own currencies, thus abandoning the use of the dollar. According to reports, China and Japan have reached agreement to settle their trade between themselves in their own currencies. The moves away from the dollar as the currency of international transactions means that the dollar’s exchange value will fall as the demand for dollars falls. Whereas the Federal Reserve can create dollars with which to purchase the Treasury’s debt, thus preventing a fall in bond prices, the Federal Reserve cannot prop up the dollar’s exchange value by creating more dollars with which to purchase dollars. Dollars would have to be taken off the foreign exchange market by purchasing them with other currencies, but in order to have these currencies the US would have to be running a trade surplus, not a long-term trade deficit. In the short-run, the Federal Reserve could arrange currency swap agreements in which foreign central banks swap their currencies for dollars in order to supply the Federal Reserve with currencies with which to soak up dollars. However, only a limited number of swaps could be negotiated before foreign central banks understood that the dollar’s fall in value was not a temporary event that could be propped up with currency swaps. As the value of the dollar will fall as countries move away from its use as reserve currency, the values of dollar-denominated assets also will fall. The Federal Reserve, even with full cooperation from the banking system employing every fraud technique known, cannot prevent interest rates from rising on debt instruments denominated in a currency whose value is falling. Think about it this way. A person, fund, or institution owns bonds or any debt instruments carrying a negative rate of interest, but continues to hold the instruments because interest rates, despite the increase in debt, are creeping down, raising bond prices and producing capital gains in the bonds. What happens when the exchange value of the currency in which the debt instruments are denominated falls? Can the price of the bond stay high even though the value of the currency in which the bond is denominated falls? The drop in the exchange value of the currency hits the bond price in a second way. The price of imports rise, and this pushes up prices. The inflation measures will show higher inflation. How long will people hold debt instruments paying negative interest rates as inflation rises? Perhaps there are historical cases in which bond prices continue to rise indefinitely (or even hold firm) as inflation rises, but I have never heard of them. As the Federal Reserve can create money, theoretically the Federal Reserve’s prop-up schemes could continue until the Federal Reserve owns all dollar-denominated financial assets. To cover the holes in its own balance sheet, the Federal Reserve could just print more money. Some suspect that the Federal Reserve, in order to forestall a declining dollar and thus declining prices of dollar-denominated financial instruments, is behind the sales of naked shorts every time demand for physical bullion drives up the price of gold and silver. The short sales–paper sales–cancel the impact on price of the increased demand for bullion. Some also believe that they see the Federal Reserve’s hand in the stock market. One day stocks fall 200 points. The next day stocks rise 200 points. This up and down pattern has been ongoing for a long time. One possible explanation is that as wary investors sell their equity holdings, the Federal Reserve, or the “plunge protection team,” steps in and buys. Just as the “terrorist threat” was used to destroy the laws that protect US civil liberty, the financial crisis has resulted in the Federal Reserve moving far outside its charter and normal operating behavior. To sum up, what has happened is that irresponsible and thoughtless–in fact, ideological–deregulation of the financial sector has caused a financial crisis that can only be managed by fraud. Civil damages might be paid, but to halt the fraud itself would mean the collapse of the financial system. Those in charge of the system would prefer the collapse to come from outside, such as from a collapse in the value of the dollar that could be blamed on foreigners, because an outside cause gives them something to blame other than themselves. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. Paul Craig Roberts is a frequent contributor to Global Research. Global Research Articles by Paul Craig Roberts Subscribe to the Global Research E-Newsletter Shop Global Research !
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#1. To: tom007 (#0)
My bet is that those in charge will then pull a Hitler on us and take us into a world war in order to keep the focus off of themselves. Calling Ron Paul an isolationist is like calling your neighbor a hermit because he doesn't come over and break your window - unknown I WITHDRAW MY CONSENT! You never gave it in the first place. Consent to the state is implicit. But you knew that. But you knew that. Yep. That's why I explicitly withdrew my consent. :) Calling Ron Paul an isolationist is like calling your neighbor a hermit because he doesn't come over and break your window - unknown I WITHDRAW MY CONSENT! Them asslickers with all their damned hardware and their feminarmy can't even fight a bunch of farmers with Enfields. They'll make it a two-front war too. Perhaps they'll find themselves at the gibbet one fine day. He acts as if he didn't know that was the plan all along..... Commentary - 03/29/2008 1907 to 1913 -- 2007 to 2013? The planned Panic of 1907 lead to the creation of our central bank, which we know as the Federal Reserve. Will the Panic of 2007 lead to the final end-game originally planned 100 years ago. We've already lost 95% of the value of our money since 1913. And now that it's 2008, will we lose the rest of it within the next five years? Will the Federal Reserve then have total control of ALL of our finances? If so, the original goal [planned over 400 years ago] to "own the earth in fee simple" will have been achieved....... 04/06/2008 - Who Now Controls Most Of America's Mortgages? 03/16/2008 - Owning The U.S. In Fee Simple 03/12/2008 - Scientifically-Created Depressions [And Why!] etc. etc. : http://greatreddragon.com / greatreddragon.com/chap1.htm / http://greatreddragon.com/toc.htm As We Slept Federal Reserve Banks Guilty of Treason Against We the People... You Be The Judge and Jury is a FREE on-line book exposing the acts of rebellion, sedition, insurrection and treason being committed by the Federal Reserve Banks, IRS, U.S. Government against We the People. The United States Government, Federal Reserve Banks, IRS, Internal Revenue Service, the President, Congress, the Supreme Court, the Governors, lawyers, judges, FBI, and CIA have been committing treason, rebellion, insurrection, and waging war against its people under the War Powers Act of 1917, as amended, March 9, 1933. It's all right here in black and white! As We Slept offers further proof of the Crimes being committed. God, Satan "The Illuminati" and Bible Prophesy Exposed! The defendants in the case are the Board of Governors Federal Reserve Banks, IRS and the United States Government et al. You be the Judge and Jury! The final verdict of Guilt or Innocence is entirely in your hands! "...as long as there..remain active enemies of the Christian church, we may hope to become Master of the World...the future Jewish King will never reign in the world before Christianity is overthrown - B'nai B'rith speech http://www.biblebelievers.org.au/luther.htm / http://bible.cc/psalms/83-4.htm
While we were sleeping somebody stole America. What if you were to wake up one morning to that headline in your morning paper? Well, it's time to WAKE-UP AMERICA, because as we slept, someone has stolen America. The thieves have dismantled our Constitution, eroded our rights and liberties and destroyed our economy. WAKE-UP AMERICA AND LOOK AROUND YOU! What do you see? Our banks and savings and loans are failing, while you, the taxpayers are held responsible for the bail-out. Real estate foreclosures are at an all time high. American farmers are loosing their land and the bread-basket of the world is being transferred to foreign interests. Our factories and steel mills are closing and unemployment continues climbing to unprecedented numbers. Giant companies like IBM, AT&T, XEROX, Hughes Aircraft, Boeing, G.M. and Ford Motor Co. etc. are laying-off more and more American workers. American jobs are being transferred to foreign countries under the GATT & NAFTA (North American Free Trade Agreement). Business failures are skyrocketing. Our streets are filling up with homeless men, women and children. Taxes continue to rise, while government services decrease. The national debt is exceeded $15 trillion with no end in sight. Americans have become indentured servants! Wars and rumors of wars have reached the four corners of the earth. Our freedoms and liberties are being bartered for a dole. Our Constitution is ignored as it sits on a shelf collecting dust. Corruption has reached every facet of government. The judicial system that is supposed to protect our Inalienable Rights has failed us. Our sovereignty is being taken away in the name of "NEW WORLD ORDER". Our nation fears its own government and the people are saying, "There is nothing I can do about it." America was once a proud, free, and prosperous nation and now, we are the world's largest debtor nation . . . and the worst is yet to come. Economic collapse knocks at our door. Thomas Jefferson, declared, "If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." Did Jefferson have a crystal ball when he spoke these words? Has a private bank taken control over our nation's money supply? The following is a conversation with Mr. Ron Supinski of the Public Information Department of the San Francisco, Federal Reserve Bank. This is an account of that conversation reconstructed to the best of my ability from notes taken during the conversation on October 8, 1992. CALLER - Mr. Supinski, does my country own the Federal Reserve System? MR. SUPINSKI - We are an agency of the government. CALLER - That's not my question. Is it owned by my country? MR. SUPINSKI - It is an agency of the government created by congress. CALLER - Is the Federal Reserve a Corporation? MR. SUPINSKI - Yes CALLER - Does my government own any of the stock in the Federal Reserve? MR. SUPINSKI - No, it is owned by the member banks. CALLER - Are the member banks private corporations? MR. SUPINSKI - Yes CALLER - Are Federal Reserve Notes backed by anything? MR. SUPINSKI -Yes, by the assets of the Federal Reserve but, primarily by the power of congress to lay tax on the people. CALLER - Did you say, by the power to collect taxes is what backs Federal Reserve Notes? MR. SUPINSKI - Yes CALLER - What are the total assets of the Federal Reserve? MR. SUPINSKI - The San Francisco Bank has $36 Billion in assets. CALLER - What are these assets comprised of? MR. SUPINSKI - Gold, the Federal Reserve Bank itself and government securities. CALLER - What value does the Federal Reserve Bank carry gold per oz. on their books? MR. SUPINSKI - I don't have that information but the San Francisco Bank has $1.6 billion in gold. CALLER - Are you saying the Federal Reserve Bank of San Francisco has $1.6 billion in gold, the bank itself and the balance of the assets is government securities? MR. SUPINSKI - Yes. CALLER - Where does the Federal Reserve get Federal Reserve Notes from? MR. SUPINSKI - They are authorized by the Treasury. CALLER - How much does the Federal Reserve pay for a $10 Federal Reserve Note? MR. SUPINSKI - Fifty to seventy cents. CALLER - How much do they pay for a $100.00 Federal Reserve Note? MR. SUPINSKI - The same fifty to seventy cents. CALLER - To pay only fifty cents for a $100.00 is a tremendous gain, isn't it? MR. SUPINSKI - Yes CALLER - According to the U.S. Treasury, the Federal Reserve pays $20.60 per 1,000 denomination or a little over two cents for a $100.00 bill, is that correct? MR. SUPINSKI - That is probably close. CALLER - Doesn't the Federal Reserve use the Federal Reserve Notes that cost about two cents each to purchase U.S. Bonds from the government? MR. SUPINSKI - Yes, but there is more to it than that. CALLER - Basically, that is what happens? MR. SUPINSKI - Yes, basically you are correct. CALLER - How many Federal Reserve Notes are in circulation? MR. SUPINSKI - $263 billion and we can only account for a small percentage. CALLER - Where did they go? MR. SUPINSKI - Peoples mattress, buried in their back yards and illegal drug money. CALLER - Since the debt is payable in Federal Reserve Notes, how can the $4 trillion national debt be paid-off with the total Federal Reserve Notes in circulation? MR. SUPINSKI - I don't know. CALLER - If the Federal Government would collect every Federal Reserve Note in circulation would it be mathematically possible to pay the $4 trillion national debt? MR. SUPINSKI - No CALLER - Am I correct when I say, $1 deposited in a member bank $8 can be lent out through Fractional Reserve Policy? MR. SUPINSKI - About $7. CALLER - Correct me if I am wrong but, $7 of additional Federal Reserve Notes were never put in circulation. But, for lack of better words were "created out of thin air " in the form of credits and the two cents per denomination were not paid either. In other words, the Federal Reserve Notes were not physically printed but, in reality were created by a journal entry and lent at interest. Is that correct? MR. SUPINSKI - Yes CALLER - Is that the reason there are only $263 billion Federal Reserve Notes in circulation? MR. SUPINSKI - That is part of the reason. CALLER - Am I mistaking that when the Federal Reserve Act was passed (on Christmas Eve) in 1913, it transferred the power to coin and issue our nations money and to regulate the value thereof from Congress to a Private corporation. And my country now borrows what should be our own money from the Federal Reserve (a private corporation) plus interest. Is that correct and the debt can never be paid off under the current money system of country? MR. SUPINSKI - Basically, yes. CALLER - I smell a rat, do you? MR. SUPINSKI - I am sorry, I can't answer that, I work here. CALLER - Has the Federal Reserve ever been independently audited? MR. SUPINSKI - We are audited. CALLER - Why is there a current House Resolution 1486 calling for a complete audit of the Federal Reserve by the G.A.O. and why is the Federal Reserve resisting? MR. SUPINSKI - I don't know. CALLER - Does the Federal Reserve regulate the value of Federal Reserve Notes and interest rates? MR. SUPINSKI - Yes CALLER - Explain how the Federal Reserve System can be Constitutional if, only the Congress of the U.S., which comprises of the Senate and the House of Representatives has the power to coin and issue our money supply and regulate the value thereof? [Article 1 Section 1 and Section 8] Nowhere, in the Constitution does it give Congress the power or authority to transfer any powers granted under the Constitution to a private corporation or, does it? MR. SUPINSKI - I am not an expert on constitutional law. I can refer you to our legal department. CALLER - I can tell you I have read the Constitution. It does NOT provide that any power granted can be transferred to a private corporation. Doesn't it specifically state, all other powers not granted are reserved to the States and to the citizens? Does that mean to a private corporation? MR. SUPINSKI - I don't think so, but we were created by Congress. CALLER - Would you agree it is our country and it should be our money as provided by our Constitution? MR. SUPINSKI - I understand what you are saying. CALLER - Why should we borrow our own money from a private consortium of bankers? Isn't this why we had a revolution, created a separate sovereign nation and a Bill of Rights? MR. SUPINSKI - (Declined to answer). CALLER - Has the Federal Reserve ever been declared constitutional by the Supreme Court? MR. SUPINSKI - I believe there has been court cases on the matter. CALLER - Have they been Supreme Court Cases? MR. SUPINSKI - I think so, but I am not sure. CALLER - Didn't the Supreme Court declare unanimously in A.L.A. Schechter Poultry Corp. vs. U.S. and Carter vs. Carter Coal Co. the corporative-state arrangement an unconstitutional delegation of legislative power? ["The power conferred is the power to regulate. This is legislative delegation in its most obnoxious form; for it is not even delegation to an official or an official body, presumptively disinterested, but to private persons." Carter vs. Carter Coal Co.] MR. SUPINSKI - I don't know, I can refer you to our legal department. CALLER - Isn't the current money system a house of cards that must fall because, the debt can mathematically never be paid-off? MR. SUPINSKI - It appears that way. I can tell you have been looking into this matter and are very knowledgeable. However, we do have a solution. CALLER - What is the solution? MR. SUPINSKI - The Debit Card. CALLER - Do you mean under the E.F.T. Act (Electronic Funds Transfer)? Isn't that very frightening, when one considers the capabilities of computers? It would provide the government and all it's agencies, including the Federal Reserve such information as: You went to the gas station @ 2:30 and bought $10.00 of unleaded gas @ $1.41 per gallon and then you went to the grocery store @ 2:58 and bought bread, lunch meat and milk for $12.32 and then went to the drug store @ 3:30 and bought cold medicine for $5.62. In other words, they would know where we go, when we went, how much we paid, how much the merchant paid and how much profit he made. Under the E.F.T. they will literally know everything about us. Isn't that kind of scary? MR. SUPINSKI - Yes, it makes you wonder. CALLER - I smell a GIANT RAT that has overthrown my constitution. Aren't we paying tribute in the form of income taxes to a consortium of private bankers? MR. SUPINSKI - I can't call it tribute, it is interest. CALLER - Haven't all elected officials taken an oath of office to preserve and defend the Constitution from enemies both foreign and domestic? Isn't the Federal Reserve a domestic enemy? MR. SUPINSKI - I can't say that. CALLER - Our elected officials and members of the Federal Reserve are guilty of aiding and abetting the overthrowing of my Constitution and that is treason. Isn't the punishment of treason death? MR. SUPINSKI - I believe so. CALLER - Thank you for your time and information and if I may say so, I think you should take the necessary steps to protect you and your family and withdraw your money from the banks before the collapse, I am. MR. SUPINSKI - It doesn't look good. CALLER - May God have mercy on the souls who are behind this unconstitutional and criminal act called the Federal Reserve. When the ALMIGHTY MASS awakens to this giant hoax, they will not take it with a grain of salt. It has been a pleasure talking to you and I thank you for your time. I hope you will take my advice before it does collapse. MR. SUPINSKI - Unfortunately, it does not look good. CALLER - Have a good day and thanks for your time. MR. SUPINSKI - Thanks for calling. If the reader has any doubts to the validity of this conversation, call your nearest Federal Reserve Bank, YOU KNOW THE QUESTIONS TO ASK! You won't find them listed under the Federal Government. They are in the white pages, along with Federal Express, Federal Deposit Insurance Corp. (FDIC), and any other business. Find out for yourself if all this is true. And then, go to your local law library and look up the case of Lewis vs. U.S., case #80-5905, 9th Circuit, June 24, 1982. It reads in part: "Examining the organization and function of the Federal Reserve Banks and applying the relevant factors, we conclude that the federal reserve are NOT federal instrumentalities . . . but are independent and privately owned and controlled corporations . . . federal reserve banks are listed neither as `wholly owned' government corporations [under 31 U.S.C. Section 846] nor as 'mixed ownership' corporations [under 31 U.S.C. Section 856] . . . 28 U.S.C. Sections 1346(b), 2671. `Federal agency' is defined as: the executive departments, the military departments, independent establishments of the United States, and corporations acting primarily as instrumentalities of the United States, but does not include any contractors with the United States . . . There are no sharp criteria for determining whether an entity is a federal agency within the meaning of the Act, but the critical factor is the existence of the federal government control over the `detailed physical performance' and `day to day operations' of that entity. Other factors courts have considered include whether the entity is an independent corporation . . . whether the government is involved in the entity's finances, . . . and whether the mission of the entity furthers the policy of the United States . . . Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities . . . It is evident from the legislative history of the Federal Reserve Act that Congress did not intend to give the federal government direction over the daily operation of the Reserve Banks . . . The fact that the Federal Reserve Board regulates the Reserve Banks does not make them federal agencies under the Act . . . Unlike typical federal agencies, each bank is empowered to hire and fire employees at will. Bank employees do not participate in the Civil Service Retirement System. They are covered by worker's compensation insurance, purchased by the Bank, rather than the Federal Employees Compensation Act. Employees traveling on Bank business are not subject to federal travel regulations and do not receive government employee discounts on lodging and services . . . Finally, the Banks are empowered to sue and be sued in their own name. 12 U.S.C. Section 341. They carry their own liability insurance and typically process and handle their own claims . . ." According to the Federal Reserve Bank of Philadelphia, "When the Federal Reserve was created, its stock was sold to the member banks." ("The Hats The Federal Reserve Wears", published by the Federal Reserve Bank of Philadelphia) The original Stock-holders of the Federal Reserve Banks in 1913 were the Rockefeller's, J.P. Morgan, Rothschild's, Lazard Freres, Schoellkopf, Kuhn-Loeb, Warburgs, Lehman Brothers and Goldman Sachs. The MONEY-CHANGERS wanted to be insured they had a monopoly over our money supply, so Congress passed into law Title 12, Section 284 of the United States Code. Section 284 specifically states, "NO STOCK ALLOWED TO THE U.S." * Monopoly - "A privilege or peculiar advantage vested in one or more persons or companies, consisting in the exclusive right (or power) to carry on a particular business or trade, manufacture a particular article, or control the sale of the whole supply of a particular commodity, A form of market structure in which only a few firms dominate the total sales of a product or service. `Monopoly', as prohibited by Section 2 of the Sherman Antitrust Act, has two elements: possession of a monopoly power in relevant market and willful acquisition or maintenance of that power, as distinguished from growth or development as a consequence of a superior power, business acumen, or historical product. A monopoly condemned by the Sherman Act is the power to fix prices, or exclude competition, coupled with policies designed to use and preserve that power." (Black's Law Dictionary, 6th Edition) The Federal Reserve Act goes one step farther, "No Senator or Representative in Congress shall be a member of the Federal Reserve Board or an officer or director of a Federal Reserve Bank." They didn't want We The People to have any say in the operation of their monopoly through our elected officials. "...as long as there..remain active enemies of the Christian church, we may hope to become Master of the World...the future Jewish King will never reign in the world before Christianity is overthrown - B'nai B'rith speech http://www.biblebelievers.org.au/luther.htm / http://bible.cc/psalms/83-4.htm
My bet is that those in charge will then pull a Hitler on us and take us into a world war in order to keep the focus off of themselves. Gerald Celente Predicts A False Flag Attack Before The FED Hikes Interest Rates Sunday, July 22, 2012 Gerald Celente with Max Keiser on the Edge 20 July 2012 : ...here is the deal you keep on hearing from the FED they are talking about keeping interest low to 2014 , so they need to keep pumping dow into the system , interest rates are going to stay low as long as they keep on making the money available , at sometime it has to reverse itself and when it does it is going to be a real crisis and I think the reversal will happen when no one is looking and when the no one is looking is going to be when we are going to war that's when you are going to see the reversal start to happen because people will be focused on different things , for example 911 , the whole world was focused on 911 , you know when they allowed China into the World Trade Organization ? a couple of weeks later when no one was looking so what I am saying is you see things heating up in Syria , the war drums are beating much louder now against Iran , I believe there is going to be some kind of an event be it false flag or real that will get the people's minds off the economy that's when the situation will change the interest rates will go higher and the people won't feel the pain as much in their head they will feel the rest of their lives because they will be distracted , they do this all the time ......Video below. Disney's Cartoon Shows 'Nuclear Attack' At Olympics We Are Being Set Up. From Aurora "Massacre" (Media Contradictions) Now To "Warnings" Of A Terrorist Attack At The Olympics. Major, Serious- Questions '666' Every American To Be Microchipped In 2013 Per Obamacare US Army Preparing To Invade America - Martial Law Silver And Gold Will Go Nuts In August! Bill Murphys London Source Scandal At The IMF: Senior Economist Resigns, Says “Ashamed To Have Had Any Association With Fund At All” Washington's Message To Americans: 'We Own You' Was James Holmes A Modern MKUltra Mind Control Victim? First Video Of James Holmes Emerges: 18-Year-Old Presenting At Science Camp Proof Government Stages Mass Shootings: Batman Massacre Decoded "...as long as there..remain active enemies of the Christian church, we may hope to become Master of the World...the future Jewish King will never reign in the world before Christianity is overthrown - B'nai B'rith speech http://www.biblebelievers.org.au/luther.htm / http://bible.cc/psalms/83-4.htm
Those in charge of the system would prefer the collapse to come from outside, such as from a collapse in the value of the dollar that could be blamed on foreigners, because an outside cause gives them something to blame other than themselves.
Any perceived compliance with unconstitutional “laws” or orders put forth by government employees is NOT recognition of their authority; it is simply the result of carefully calculated submission to an entity exhibiting superior firepower.
#2. To: F.A. Hayek Fan (#1)
I WITHDRAW MY CONSENT!
"Satan / Cheney in "08" 
#3. To: tom007 (#2)
Consent to the state is implicit.
Any perceived compliance with unconstitutional “laws” or orders put forth by government employees is NOT recognition of their authority; it is simply the result of carefully calculated submission to an entity exhibiting superior firepower.
#4. To: F.A. Hayek Fan (#1)
My bet is that those in charge will then pull a Hitler on us and take us into a world war
#5. To: tom007 (#0)
As the Federal Reserve can create money, theoretically the Federal Reserve’s prop-up schemes could continue until the Federal Reserve owns all dollar-denominated financial assets.
#6. To: AllTheKings'HorsesWontDoIt (#5)
www.maxexchange.com/ybj/chapter_1.htm
#7. To: F.A. Hayek Fan (#1)
Those in charge of the system would prefer the collapse to come from outside, such as from a collapse in the value of the dollar that could be blamed on foreigners, because an outside cause gives them something to blame other than themselves.
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