THIS IS MY 164TH BLOG ON UNDERSTANDING MONEY
TOOLS
April, 2019
In this blog/tutorial we are going to look at the synopsized
history of America’s most famous “private” bank. Are we looking at Bank of America, Chase, Wells Fargo? No. First, that list of banks consists of publicly traded
corporations.
We are taking a look at our Central Bank, the Federal
Reserve Bank. I have read several
books over the years about the Federal Reserve, “the who’s, what’s and why’s”
and thought I would share some of the highlights with you. If you read my blogs you know I don’t
like banks, and there is good reason.
Watching ads and listening to bankers you think they are nice
institutions wanting to help you.
The only thing a bank wants to help you with is divesting your money
through their institutions, thus for them making a lot of money! You will find out that our Federal
Reserve Bank is right up there with them.
As a footnote on this topic, I spent 4 years in banking in
Colorado as Senior Vice-president of Trust Company of America. As a trust company we were bank
chartered and did everything in the finance realm except commercial
lending. One seminar I was sent to
while an employee with the bank was in Dallas, Texas. The lecturer made a comment that left me startled. “Your job/obligation is to locate
money, individual as well as corporate, and get that money away from their
control and under your management.” Nothing about serving the customer’s needs! That really set an accurate stage!
Footnote: From
the best of my knowledge the following is accurate from my readings and what
little mind I have remaining in re-call.
CENTRAL BANKS AND THE FEDERAL RESERVE IN THE USA:
- We
had 2 Central Banks before the Federal Reserve.
- 1781-1836 called The Bank of North America, one
and two.
- Each
bank had a 20-year charter.
- 1837-1862
State Chartered Banks (Free Banking Era) including how our Civil War was
funded.
- 1863-1913
National Banks were established with an Act in 1863. This included the ability
to create a uniform currency.
- Certain
founding fathers were against a Central Bank theory like Thomas Jefferson,
however others like Alexander Hamilton were in favor. The main concern was not to have anything to do with the
Bank of England, but Hamilton did pattern the first bank after the Bank of
England. To disassociate further
from the Bank of England they moved our Central Banks south from NYC to
Washington DC.
- Our
current Federal Reserve Bank was created by an Act of Congress on December 23,
1913.
- The
Federal Reserve. 12 Federal Reserve Districts, and 12 Branches. (Originally the forming founders wanted
the Reserve to appear that it was represented across all of the US, although
that is questionable.)
That gives a chronological overview for 150 years of
banking. The entire make-up for
the Federal Reserve is what I hope you find interesting.
In the early part of the 1900s two things were happening,
one was that there was economic turmoil, and two most big business was done
with very large corporations and wealthy families. Financing business through cash flow was growing. With growth of industry there needed to
be more bank borrowing. Banking
was a shrinking market, and this trend needed reversing, with individuals as
well as new companies going more into debt. The old-line bankers were not happy!
Starting in about 1907 a group of the wealthiest “good old
boys” in New York City came together to form ideas for a new Central Bank under
their controls. Many were from
banking. Included in the group
were J.P. Morgan, Paul Warburg (Paul’s brother, Max, helped oversee the
Rothschild money in Europe.), Nelson Aldrich (former senator of Rhode Island)
and Secretary of the Treasury, Abraham Piatt. This original group of people/bankers from NYC was estimated
to control 1/4 of the world’s wealth.
There is something called a “Hegelian Dialectic”. This can be applied to this era of
turmoil and what these bankers were up to. In this illustration, the bankers were going to exacerbate
the economic problems, albeit phony but knowing how the public would perceive
it, and then come up with solutions they designed, to their benefit and
interests. Thus, the layout for
our Federal Reserve, and making these original investors even more wealthy.
These prominent individuals mentioned above went to Jekyll
Island off the Georgia coast in secrecy to lay forth the plans of a new central
bank. As the next few years went
by, and they were closer to presenting the plans to President Wilson and
Congress, they decided on a new name distancing itself from the association of
banking, calling it The Federal Reserve; enacted in 1913. Most people even back then were suspect
of bankers, and their intentions.
This private, authoritarian and autonomous institution created a banking
monopoly under the guise of the Federal Reserve. The member banks along with individuals were investors and
paid a yield.
As enacted the Federal Reserve was set up as a private
corporation, not connected to the US government, but to stabilize the US dollar
so that such things as “runs on banks” would not happen. Individual banks could borrow from this
main bank.
Who are the investors in the Federal Reserve? No one will know. The Freedom of Information Act prevents
any disclosure. I would suspect
the same wealthy power players are duplicated with the World Bank and the
International Monetary Fund. A few
names would be the Rothschild Family, Rockefeller Family, several of the “old
line” families from the turn of the century around 1900 as well as the big
banks of today; the carry over of the J.P. Morgan/Chase, Wells Fargo, Bank of
America and others.
Even though the Federal Reserve Board is not connected to
the US Government the Chairman and Vice-Chairman, (whether a man or woman), are
appointed by the president of the United States. All decisions and regulations are to be independent of the
government.
Money controls the US and its people. The control and decisions for policy
are made by the Federal Reserve Bank.
Besides other things, the Federal Reserve Board dictates interest rates,
the amount of money outstanding and to be printed, thus the inflation rate
(Inflation Theory). The Federal
Reserve is “big business”. It
wants inflation as payments made down the road on debt will be paid back in
“cheaper” dollars because of the erosion of purchasing power!
How does this all work? The Federal Reserve Board works in conjunction with our
Treasury. As the US Government goes
more into debt we need to sell our debt instruments (bonds) to raise
money. The Federal Reserve is the
orchestrator in the transaction and very incestuous in nature with Wall Street
firms which sell the bonds worldwide.
The investment banking firms make a fortune on the commissions paid on
these transactions, and after market.
Many of the old-line families owned these investment banks. These days the Federal Reserve uses
digitized currency on balances, thus the actual printing of money is not what it
was years past.
What happens to risk?
A prime example is 2008-2009.
We did financially fail, and what happens? The banking institution is too big to fail, and the American
public bailed out the system!
So with the creation of the Federal Reserve Board it was
meant to be 1) private, 2) quite secret, 3) all controlling 4) purposely
imbedding debt upon people, companies and countries 5) and a huge money maker
with little risk? Yes!
Look at this reality.
The power the US and the Federal Reserve have and yet very little gold
or substance lies behind the whole structure in today’s world of digitized
money.
Much of the same can be said for Central Banks representing
countries around the world. We
have set the stage.
Let’s quickly look at our currency. Pick out a few bills from your wallet or
purse. I’ll take a $1 bill. At the top of the front side it says
“Federal Reserve Note”, nothing about our government, but the “private
agency”. It says, “Washington
DC”. The Department of the
Treasury has authorized it, and the Secretary of the Treasury has signed the
bill. As many of the original
founders of this nation were “free Masons” it has a temple and the “third eye”.
(My father and grandfather were Masons, my grandfather a 33rd
Degree, so I grew up with a bit of this knowledge.) I also pulled out a $20 note. Again, at the top it states it is a Federal Reserve
Note. It doesn’t say where it was
printed, but is signed by the acting Treasurer of the US. On the back side, it holds a nice picture of the White
House. The point I am making is
that “our money” is from the Federal Reserve.
I hope you found this blog of interest and learned something
about our banking system.
Also, a couple of blogs ago I finished by stating an old
Yiddish saying, “Man plans, God laughs”, meaning that life is
unpredictable. A good friend of
mine, Don Stern, thought it to be negative and suggested the following,
“Man produces with good will and character, and God
rewards.” Don’s been very
successful in a varied life from business to snow skiing, windsurfing, race car
driving and flying his own twin engine plane. Perhaps we should all listen to his words of wisdom!
