Topic: A Chain Mail I'm Starting - The Modern Monetary System: What you DON'T know - page 2. (Read 3761 times)

Before you read what I'm sending you, try taking this quick quiz. Then, see if I lied to you, when I told you you DIDN'T know what I'm about to tell you. Because, if I were to tell you this, face-to-face, that this system, say, was implemented behind closed doors when the debt ceiling was raised, you would say "No, that can't be true, you're just a crazy conspiracy theorist." And, you'd be partially right: It wasn't implemented behind closed doors when the debt ceiling was raised. Rather, it already exists, and has, for nearly 100 years. If you read this e-mail, and find the system as corrupt as I, please forward it to your contacts. Still, less than 0.0001% of Americans understands this system. If they did, then surely, they'd feel as strongly about breaking free of it as I do.

Quiz Time:

1) Which organization(s) is responsible for the largest increase of the money supply in the United States of America?
(A): The Federal Reserve
(B): The Treasury
(C): The Financial Sector
(D): Government Agencies

2) Which of the following is NOT owned by the United States Government:
(A): The Internal Revenue Service
(B): The Federal Reserve
(C): The Treasury
(D): The Securities and Exchange Commission

3) Income Tax was created so that the government could pay for...
(A): Education & Infrastructure.
(A): War.
(B): Interest on Debt
(C): Government Administrators

4) This agency or organization receives a share of any profit earned by the Federal Reserve.
(A): The Bank of England, HSBC & Barclay's
(B): The Treasury
(C): The chairman of the Federal Reserve, and his board.
(D): Fannie Mae

Lets get down to business.

Lets get down to the beginning of the Dollar, shall we?

The US Dollar began not as a federally issued currency, but as a form of measurement. You see, the founding fathers had encountered a little problem: There was a ton of national debt, and much of it was 'inherited' from individual states, and each state happened to have a different currency, some of which no longer existed. Since they wanted to make sure confidence in the government remained intact, the pledged to repay such debt, despite the underlying currency no longer existing. To do so, they standardized all debt, mandating  that all debts, individual and public, be payable in the most widely used currency in America at that time: The Spanish Silver Dollar. However, at the time, the founding fathers did NOT want to corrupt politics with wealth, and did not want to create a central bank, specifically not one that was located in a foreign nation (Spain). Thus, they took the silver content of the silver dollar, measured it, and declared that unit of measure equal to one dollar. Thus, a "dollar" is equal to 24.057g Ag.

The War Between Government  & Banks

Banks, as they normally do, figured "hey, a new asset type, quick, issue as much unsecured debt denominated in it as possible." So, they began to issue debt instruments (paper money) denominated in the above. However, such paper money was of course not real silver, but subject to the credit worthiness of the issuing bank. They were worth slightly differing amounts due to this problem. This became the government's problem when people attempted to use them to pay taxes, and the government couldn't actually collect the silver because the bank did not have it. Mr. Hamilton, proposed a solution. A National Bank will be created, standardizing the credit worthiness of a paper note of a dollar, as well. So, they only accepted Silver and Gold payments, which could then be converted to dollars. This eventually caused a huge depression with over 33% unemployment, but eventually it reverted to normal.

In this lull, banks were quietly finding new, more innovative ways of screwing people over. These activities included more excessive fractional reserve banking (for those of you who don't know how this works, its effectively using debt as payment to issue more debt, I'll explain in more detail later). Since the dollar was primarily denominated in silver at the time, banks hoarded gold while fractionally reserving silver. This caused the effective money supply of silver to decrease compared to gold, screwing the United States government who was accepting both gold and silver & exchanging between the two, since the exchange rate was no longer constant. In response to this problem, Congress set up the gold standard - now only gold was accepted as legal tender, and gold was standardized.

Bankers Strike Back

Fractional reserve banking is still strong and well, and bankers know this is how they will ultimately win the war. So, they turn it onto hyper-drive mode. They fractional reserve - actually, that's a lie, they actually didn't keep any reserve - to generate more and more debt to use as money up until, finally, the huge ponzi scheme went bust in 1907, and there was a bank run which banks could not pay - at least not with the BANK'S money. You see, while the banks were operating, doing hyper-drive fractional reserve lending, their owner's became immensely wealthy as they siphoned off profits. With his personal wealth along with some of his buddies, J.P. Morgan (the actual guy, not the company) could bail out the banks. But, like any good banker, Good 'Ol J.P. wanted a return on his investment. He wanted power.

Looking back, I found a rather fun quote from Forbes (again, the guy, not the magazine) posted on Wikipedia.

"Picture a party of the nation’s greatest bankers stealing out of New York on a private railroad car under cover of darkness, stealthily riding hundreds of miles South, embarking on a mysterious launch, sneaking onto an island deserted by all but a few servants, living there a full week under such rigid secrecy that the names of not one of them was once mentioned, lest the servants learn the identity and disclose to the world this strangest, most secret expedition in the history of American finance. I am not romancing; I am giving to the world, for the first time, the real story of how the famous Aldrich currency report, the foundation of our new currency system, was written"

Seems legit. Nobody knows what happened. All anybody knows is, that Congress and President Woodrow Wilson immediately sprang into action with such speed one would think the government was actually functional. Seriously, it must be like, the quickest decision in the history of America. Within a single day, Congress passed the Federal Reserve Act & it was signed by the president, effectively endorsing fractional reserve banking. The same year, Income Tax was, for the first time, imposed on Americans, and a new lending bubble forms, ending in the great depression. A few years later, the law is changed so that the dollar may be devalued. This devaluation was at first kept finite, however, soon it was shown that it is impossible to stop inflation once it starts. A series of devaluations began to occur, until finally, in 1976, Congress quietly removed the definition of "dollar" from the law entirely.

Now, you're probably wondering, "What the hell did J.P. bargain for?" Well, since nobody really knows, we can only piece together the information, by looking at the laws Congress passed shortly thereafter. In short, J.P. got the modern, corrupt banking system, to be a thing. Now I'm not blaming all of this on J.P. I doubt even he could conceive the scale of corruption going on today. However he got the banker's toe-hold on the government, and it was all downhill from there. J.P. got the government to officially sponsor the Federal Reserve Bank - a PRIVATE institution (NOT federal) - to be officially sponsored by the US government. 6% of all profits - its a for-profit institution - are paid out to shareholders - in the form of dividends. Before you ask who are the shareholders... I don't bloody know! Its 'top secret' We do know the original shareholders, however. The original shareholders were a group - a very large group, originally, too large for me to list - of carefully selected banks throughout the states.

The Modern System

Now that you know how we got here, let me explain how the system currently works. Starting, with the Federal Reserve. The Federal Reserve has three jobs: (1) To make money for its shareholders, (2) to lend money to banks so they don't go bankrupt and most recently (3), to buy bonds. Additionally, it is granted the exclusive right to write what I like to call 'VOODOO CHECKS.' These checks are written directly from the US treasury, and their amount is only restrained by the amount of dollars in the ENTIRE TREASURY. Only, there isn't any definition for "dollar" in US law anywhere, anymore. So, in other words, the Federal Reserve gets to write checks so large that the US treasury has to print money in order to make sure they don't bounce.

The system starts when the US Government goes into debt. It has promised to pay some workers, but it can't. So what does it do? It writes bonds. These bonds, it sells to banks, at auctions. The banks, in turn, re-sell the bonds on the markets after a mark-up which they take as profit. The Federal Reserve, whose job is to buy bonds, goes and writes a VOODOO CHECK to buy those bonds. Now, the US Government owes money to the bondholder, which is the Federal Reserve, plus interest. In this way, the US Government is effectively paying the Bankers, and the Federal Reserve, money, only so the Federal Reserve can order the Government to pay the Federal Reserve to loan to the Government, so that the government can finally pay its workers.

Now, those workers go, and get their money, and go right back to the banks, to deposit it. And now we see, the same process repeated on an individual scale. The deposit is then lent out to another person, so that person can buy something from a business, so that  business can deposit the money back into the bank, so the bank can again re-lend the same money back to someone else, so that person can buy a car, so the owner of that car can deposit the money back into the bank again, etc... And, of course, on each successive loan, the bank collects interest. And, when the original depositor wants out, but all the bank's money is lent out? The bank goes right back to the federal reserve, who loans the bank money effectively interest-free, using yet another VOODOO CHECK, so the bank can pay back the depositor.

But remember those bonds that the US Government sold, to the bankers, who then sold it to the Federal Reserve. The US Government has to pay those back, with interest, as well. So what happens? Either higher taxes, in the form of, remember, Income Tax - or more debt, in more bonds, to sell to more bankers, for more voodoo checks. And if income tax is raised, then individuals won't have enough money, so they have to go back to the bank to borrow money to pay the tax, now leaving THEM paying interest as well. In none of these scenarios is a single dime of debt actually destroyed. More debt is merely created, since the government can't print its own money, it has to ask the Federal Reserve to do so, who won't just give them the newly printed money it made at no expense through a VOODOO CHECK, but will charge interest.

What we have here, is something very special. We have debt, debt that can, by the very nature of the system, never be paid off. Debt, by the government, which is either passed to the people in the form of taxation, or through the form of inflation, and still only may increase further. There is a name for such unpayable, unending debt. Slavery.

Thanks for reading,
Kazu - Bitcoin address: 1MvV5AMcNXD6cgzbto3Db81xV7WpQUB9GY.
(Because there are no Voodoo Bitcoin Checks)

Answers to quiz questions:
Question (1): C, the Financial Sector. Fractional Reserve Banking is responsible for over 95% of the money supply in the United States.
Question (2): B, the Federal Reserve. The Federal Reserve is owned by a group of banks, not by the United States Government.
Question (3): B, Interest on Debt. Income Tax was created in the same year as the Federal Reserve, in fact.
Question (4): A, the Bank of England. Due to a complex series of mergers in the financial sector, English banks now control a large number of shares of the United States Federal Reserve which pays 6% of its income to shareholders.