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America’s Economic Collapse: An Intricate Web Of Money, Power and Political Agendas, Part 3

For Parts 1 and 2, go here.

America’s Economic Collapse: An Intricate Web of Money, Power and Political Agendas, Part 3

(Author’s Note: There has been comments about the conspiracy theory surrounding JFK and EO11110. This article has two distincts parts; G. Edward Griffin’s take on that theory and the continuation of the “Money Men”.  Skip the first part if you want to get back to the Fed quickly.)

There are probably few people that do not know who President John F. Kennedy was, and how he was assassinated on November 22nd, 1963.  What is a little known fact is that 5 months prior to his death, he signed Executive Order 11110 amending EO10289. (H/T to TruthIsgold and GM, loyal Monster readers for their input and links.)

According to G. Edward Griffin (of Jekyll Island fame):

THE JFK MYTH
Was he assassinated because he opposed the Fed?
© 2000 by G. Edward Griffin – Updated 2006 December 13

This is in reply to an e-mail I received pointing out the views of the Christian Common-Law Institute regarding an alleged conflict between JFK and the Federal Reserve. It also suggested that this could have been the reason he was assassinated. On their website, the CCLI stated:

On June 4, 1963, a virtually unknown Presidential decree, Executive Order 11110, was signed with the authority to basically strip the Federal Reserve Bank of its power to loan money to the United States Federal Government at interest. With the stroke of a pen, President Kennedy declared that the privately owned Federal Reserve Bank would soon be out of business. President Kennedy’s Executive Order 11110 gave the Treasury Department the explicit authority: “to issue silver certificates against any silver bullion, silver, or standard silver dollars in the treasury.”… Perhaps the assassination of JFK was a warning to all future presidents not to interfere with the private Federal Reserve’s control over the creation of money.

This is what I refer to on page 569 of my book, The Creature from Jekyll Island, as “The JFK Rumor.” I cannot accept this interpretation of history because of the following facts:

THE EXECUTIVE ORDERS
If you look at a copy of EO 11110 you will find that it does not order the issuance of Silver Certificates. It orders an amendment to EO 10289. If you then look up EO 10289, you will find that it says:

The Secretary of the Treasury is hereby designated and empowered to perform the following-described functions of the President without the approval, ratification, or other action of the President.

Those functions did not include the power to issue Silver Certificates. The purpose of EO 11110 was to add that power to the list. The exact wording of the Order was:

Executive Order No. 10289 of September 19, 1951, as amended, is hereby further amended (a) By adding at the end of paragraph 1 thereof the following subparagraph (j): (1) “The authority to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury.”

Therefore, my statement in The Creature from Jekyll Island is correct. EO 11110 did not order the printing of Silver Certificates. It ordered the amendment of a previous executive order so that the United States Code would authorize or “empower” the Secretary of the Treasury to issue Silver Certificates if the occasion should arise.

The occassion did arise between January 1963 and October 1964 with the issuance of 768 million of the 1957B Series, which carried the signatures of Kathryn O’Hay Granahan and C. Douglas Dillon. This was the smallest issuance since 1935, and it was the last. (See “Silver Certificate” at http://en.wikipedia.org/wiki/Silver_Certificate.) Please remember, however; that, EO11110 did not order the issuance of these certificates. It merely authorized the Secretary of the Treasury to do so, which is what happened.

The following additional explanation was contained in a 1996 report from the Congressional Research Service at the Library of Congress:

What E.O. 11110 did was to modify previous Executive Order 10289, delegating to the Secretary of the Treasury various powers of the President. To these delegated powers, E.O. 11110 added the power to alter the supply of Silver Certificates in circulation. Executive Order 11110, therefore, did not create any new authority for the Treasury to issue notes; it only affected who could give the order, the Secretary or the President.

The reason for the move was that the President had just signed legislation repealing the Silver Purchase Act. With this repeal, the Treasury Secretary could no longer control the issue of Silver Certificates on his own authority. However, the issuance of certificates could be controlled under the President’s authority. Hence, for administrative convenience, President Kennedy issued Executive Order 11110.

Ironically, the purpose of the order and the legislation was to decrease the circulation of Silver Certificates, with Federal Reserve Notes taking their place. As economic activity grew and prices rose in the 1950s and early 1960s, the need for small-denomination currency grew at the same time that the price of silver increased. The Treasury required silver for the increasing number of Silver Certificates and coins needed for transactions. But the price of silver was rapidly approaching the point that the silver in the coins and in reserve for the certificates was worth more than the face value of the money.

To conserve on the silver needs of the Treasury, President Kennedy requested legislation needed to bring the issuance of Silver Certificates to an end and to authorize the Fed to issue small denomination notes (which it could not at that time). The Fed began issuing small denomination notes almost immediately after the legislation was passed. And in October 1964, the Treasury ceased issuing Silver Certificates altogether. If anything, E.O. 11110 enhanced Federal Reserve power and did not in any way reduce it.” (See “Money and the Federal Reserve System: Myth and Reality,” by G. Thomas Woodward, Specialist in Macroeconomics, Economics Division, Congressional Research Services, Library of Congress, CRS Report for Congress, No. 96-672 E, July 31, 1996.)

Let’s put this issue into perspective. The proponents of the JFK Myth assert that Kennedy was assassinated because he was about to issue Silver Certificates, thereby denying the bankers their customary interest payments on the nation’s currency. However, the reality was just the opposite. Previously, the President could have issued Silver Certificates on his own authority; but, with the signing of EO 11110, he delegated that authority to the Secretary of the Treasury. At that time, the Secretary of the Treasury was Douglas Dillon from a well-known and powerful banking family. That means Kennedy surrendered the power to issue Silver Certificates and gave it to a member of the banking fraternity who could do with it as he pleased “without the approval, ratification, or other action of the President.” Dillon, of course, would have strong motive to preserve the dominance of Federal Reserve Notes. The theory that Kennedy was getting ready to issue Silver Certificates is without evidence or logic.

The CCLI makes this additional claim in its report:

The Christian Common Law Institute has exhaustively researched this matter through the Federal Register and Library of Congress. We can now safely conclude that this Executive Order has never been repealed, amended, or superseded by any subsequent Executive Order. In simple terms, it is still valid.

This is not supported by the facts. The power granted to the Secretary of Treasury to issue Silver Certificates was rescinded on September 9, 1987, by Executive Order 12608, signed by President Reagan. The official purpose of the Order was stated as “Elimination of unnecessary Executive orders and technical amendments to others.” It did not affect EO 11110 directly but did affect the parent EO 10289 – along with 62 other executive orders. That is how paragraph (j) was amended to remove the power in question. This Order can be found in its entirety in the Federal Register 52 FR 34617.

The picture is blurred by the fact that the Treasury did issue United States Notes in the same year as EO 11110 (1963) but, as discussed further along, U.S. Notes are not the same as Silver Certificates. Furthermore, their issuance had nothing to do with EO 11110. It was mandated by an 1868 act of Congress, which required the Secretary of the Treasury to maintain the amount of U.S. Notes outstanding at a fixed level. This did not originate with JFK and, in fact, he probably had no deep understanding of it. It was a routine matter initiated by the Treasury merely to replace worn and damaged specimens of older Notes in order to comply with the 1868 law. Apparently some of these new Notes did get into circulation but were quickly snapped up by private collectors. They never became a significant part of the money supply and, in fact, were not intended to.

THE SPEECH THAT NEVER WAS
The persistent rumor regarding the bankers’ role in JFK’s death was reinforced by several books circulated in conservative circles. They contained an ominous passage from Kennedy’s speech at Columbia University, just ten days before his assassination. He is quoted as saying: “The high office of President has been used to foment a plot to destroy the Americans’ freedom, and before I leave office I must inform the citizen of his plight.” [Quoted by M.L. Beckman, Born Again Republic, Billings, Montana, Freedom Church, 1981, p. 23; also by Lindsay Williams, To Seduce A Nation, Kasilof, Arkansas: Worth Publications, 1984, p. 26.] However, when Columbia University was contacted to provide a transcript of the speech, it was learned that Kennedy never spoke there – neither ten days before his assassination nor at any other time! Ronald Whealan, head librarian at the John Fitzgerald Kennedy Library in Boston, provides this additional information: “Ten days prior to the assassination he was at the White House meeting with, among others, the ambassador to the United States from Portugal.” [Source: Hollee Haswell, Curator at the Low Memorial Library, Columbia University.]

It is possible that the President did make the remarks attributed to him on a different date before a different audience. Even so, it is a cryptic message that could have several meanings. That he intended to expose the Fed is the least likely of them all. Kennedy had been a life-long collectivist and internationalist. He had attended the Fabian London School of Economics; participated in the destruction of the American money supply; and engineered the transfer of American wealth to foreign nations. (See page 109 of The Creature from Jekyll Island.) There is little reason to believe that he had suddenly “seen the light” and was reversing his life-long beliefs and commitments.

SILVER CERTIFICATES VS. U.S. NOTES
These facts alone should be enough to settle the matter, but there is yet one more point of confusion to be cleared up, and that involves the difference between Silver Certificates and United States Notes. In monetary terms, a Note means a promissory note. A Note is any financial instrument that states in clear and unambiguous terms who is to pay what to whom on what date. All four elements must be included. [See Ewart, James E., Money (Seattle, Principia Publishing, 1998), pp. 27-29.] Therefore, any paper currency that displays a statement such as “The United States Treasury will pay to the bearer on demand twenty dollars in silver coin” is a Note. A Silver Certificate is just one form of a Note. Other forms existed in the past and included Bank Notes, United States Notes, Gold Certificates, and even Federal-Reserve Notes in those by-gone days when they were backed by gold.

Earlier issues of U.S. Notes displayed printed statements to the effect that (1) the bearer could redeem them (2) at the Treasury (3) on demand (4) either for dollars or a specified weight of gold or silver. During those years, a dollar was defined by law as 371.25 grains of pure silver, which was the amount contained in a One-Dollar silver coin. The law also provided that the metal could be in the form of coins, dust, nuggets, plate, or bullion. Therefore, whether the phrase printed on the currency promised dollars, silver, or gold, it ultimately meant precious metal in one form or another – usually coin. Since there was nothing ambiguous about that, those U.S. Notes were true Notes in the legal sense because they contained all four elements of a promissory note.

This tradition began to change in the late 1960s and, since about 1971, U.S. Notes have become very ambiguous, indeed, about what can be redeemed for them. The former clearly written contracts have now been replaced by random, unconnected phrases such as The United States of America; Twenty Dollars: This note is legal tender for all debts, public and private. These words look official and impressive but, in terms of a contract to redeem the currency for something of intrinsic value, they have no meaning at all. Silver Certificates once were a promise to deliver silver. U.S. Notes now are a promise to deliver taxes and inflation.

Even in 1963 when EO 11110 was issued, there were important legal and technical differences in the regulations that governed the issuance of Silver Certificates and U.S. Notes. These words were not used interchangeably. Regulations pertaining to the issuance of Silver Certificates could not be applied to the issuance of U.S. Notes, and vice versa. When EO 11110 authorized the issuance of Silver Certificates, it said nothing about U.S. Notes. The subsequent issuance of U.S. Notes, therefore, had nothing to do with EO 11110. And that is the point of this analysis. Without that understanding, one cannot grasp the significance of the JFK executive orders.

I do not claim to have the final answers on these issues, but this is where our research has led so far. I am open to additional information or interpretation. I would especially welcome a response from the Christian Common Law Institute.

G. Edward Griffin
October 15, 2000

Hopefully Mr. Griffin’s explanation will put some of the controversy to bed on this issue, but that still leaves us with the 7 Money Men who put together the Federal Reserve Act.

Time to jump back into the deep end of the pool.  Here are the players whose personal agendas have shaped our country over the last 100 years and who are the Jekyll Island Money Men who crafted the Federal Reserve Act.  I believe that it is important to know these men as more than just the names we have heard over and over again in relation to other issues; therefore, the history class.

As stated by G. Edward Griffin, these gentlemen represented 1/4 of all the wealth in the WORLD at that time; I am thinking they were smart and accustomed to getting what they wanted.  Please do not be alarmed that we are going a bit backwards, (remember how much the Socialism Series had to jump around?).  It is important to have a clear picture of who these men were and how they were connected by blood, marriage, and dynasty, and why you, as the average American, might not trust the Federal Reserve to have your best interests at heart.

Our history with central banks:

The first institution with responsibilities of a central bank in the U.S. was the First Bank of the United States, chartered in 1791 by Alexander Hamilton. Its charter was not renewed in 1811. In 1816, the Second Bank of the United States was chartered. Early renewal of the bank’s charter became the primary issue in the reelection of President Andrew Jackson. After Jackson, who was opposed to the central bank, was reelected, he pulled the government’s funds out of the bank. Nicholas Biddle, President of the Second Bank of the United States, responded by contracting the money supply to pressure Jackson to renew the bank’s charter. The country entered into a recession, and the bank blamed Jackson’s policies. The bank’s charter was not renewed in 1836. From 1837 to 1862, in the Free Banking Era there was no formal central bank. From 1862 to 1913, a system of national banks was instituted by the 1863 National Banking Act. A series of bank panics, in 1873, 1893, and 1907 provided strong demand for the creation of a centralized banking system.

The timeline of central banking in the United States is as follows:
1791-1811: First Bank of the United States
1811-1816: no central bank
1816-1836: Second Bank of the United States
1837-1862: Free Bank Era
1863-1913: National Banks
1913-Present: Federal Reserve System

The main motivation for the third central banking system came from the Panic of 1907, which renewed demands for banking and currency reform.[2] During the last quarter of the 19th century and the beginning of the 20th century the United States economy went through a series of financial panics.[3] According to proponents of the Federal Reserve System and many economists, the previous national banking system had two main weaknesses: an “inelastic” currency; and a lack of liquidity.[3] The following year Congress enacted the Aldrich-Vreeland Act which provided for an emergency currency and established the National Monetary Commission to study banking and currency reform.[4] The American public believed that the Federal Reserve System would bring about financial stability, so that a panic like the one in 1907 could never happen again; but just 16 years later, in 1929, the stock market crashed again, and the United States entered the worst depression in its history, the Great Depression. Critics of the Federal Reserve System including Milton Friedman state that the Federal Reserve System helped to cause the Great Depression.

The Federal Reserve Act
Further information: Federal Reserve Act

Newspaper clipping, December 24, 1913

The chief of the bipartisan National Monetary Commission was financial expert and Senate Republican leader Nelson Aldrich. Aldrich set up two commissions — one to study the American monetary system in depth and the other, headed by Aldrich himself, to study the European central-banking systems and report on them.[4] Aldrich went to Europe opposed to centralized banking, but after viewing Germany’s banking system came away believing that a centralized bank was better than the government-issued bond system that he had previously supported. Centralized banking was met with much opposition from politicians, who were suspicious of a central bank and who charged that Aldrich was biased due to his close ties to wealthy bankers such as J.P. Morgan and his daughter’s marriage to John D. Rockefeller, Jr.

Aldrich fought for a private bank with little government influence, but conceded that the government should be represented on the Board of Directors. Most Republicans favored the Aldrich Plan,[5] but it lacked enough support in the bipartisan Congress to pass.[6] Progressive Democrats instead favored a reserve system owned and operated by the government and out of control of the “money trust”, ending Wall Street’s control of American currency supply.[5] Conservative Democrats fought for a privately owned, yet decentralized, reserve system, which would still be free of Wall Street’s control.[5] The Federal Reserve Act passed Congress in late 1913 on a mostly partisan basis, with most Democrats in support and most Republicans against it. (bold emphasis mine)

Senator Nelson Aldrich:

Nelson Wilmarth Aldrich (November 6, 1841April 16, 1915) was a prominent American politician and a leader of the Republican Party in the Senate, where he served from 1881 to 1911.

Because of his impact on national politics and central position on the pivotal Senate Finance Committee, he was referred to by the press and public alike as the “General Manager of the Nation”, dominating all tariff and monetary policies in the first decade of the 20th century. In a career that spanned three decades, Aldrich helped to create an extensive system of tariffs that protected American factories and farms from foreign competition. He rebuilt the American financial system along Progressive lines through the institution of the federal income tax amendment and the Federal Reserve System. He did so in the belief that it would lead to greater efficiency. Aldrich became wealthy with investments in street railroads, sugar, rubber and banking. His son Richard Steere Aldrich became a U.S. Representative, and his daughter, Abby, married John D. Rockefeller, Jr., the only son of John D. Rockefeller. Her son, Nelson Aldrich Rockefeller, served as Vice President of the United States under Gerald Ford.

Abraham Piatt Andrew:

Assistant Secretary of the Treasury
Member of the “National Monetary Commission” (dates uncertain)
1909 : Director of the U.S. Mint (1909-10)

Frank Vanderlip:

Frank A. Vanderlip (1864 – June 30, 1937) was an American banker. From 1897-1901, Vanderlip was the Assistant Secretary of Treasury for President of the United States William McKinley’s second term, 1897-1901. In that office he negotiated with National City Bank a $200 million loan to the government to finance the Spanish American War. Thereafter he was vice president and then president of National City Bank (1909-19). In November, 1910, he was a member of the Jekyll Island group, a group of bankers that wrote the bill that became the Federal Reserve Act.

Henry Davison:

Henry Pomeroy Davison (June 12, 1867 in Troy, Pennsylvania – May 6, 1922 in Locust Valley, New York) was an American banker and philanthropist.

…Three years later he moved to New York City where he was employed by the Astor Place Bank, and sometime later became president of the Liberty National Bank. Several years later he was involved in the founding and formation of the Bankers Trust Company. In 1909 he became a senior partner at JP Morgan & Company, and in 1910 he was a participant in the secretive meeting on Jekyll Island, Georgia that may have led to the creation of the Federal Reserve and has generated much speculation over the years.

Charles Norton:

President of First National Bank of New York (J.P. Morgan Dominated)

Benjamin Strong:

Benjamin Strong, Jr. (December 22, 1872 – October, 16, 1928) was an American economist. He served as Governor of the Federal Reserve Bank of New York for 14 years until his death. Strong exerted great influence over the policy and actions of the entire Federal Reserve System.

Strong was also involved in the establishment of the Federal Reserve System. After the panics of the 1890s, leading bankers believed a private central bank should be created to issue money. The public was adamantly opposed to the establishment of a central bank. Strong, who was Vice President of Banker’s Trust of New York, was JP Morgan’s emissary to the secret Jekyll Island (Georgia) expedition in 1910—one of the selected members who stayed at the luxurious Jekyll Island Hunt Club retreat in November for a private ten-day conference. Also in attendance were Paul Warburg, a recent immigrant from a prominent German banking family who was a partner in the New York banking house of Kuhn, Loeb & Co.; Senator Nelson Aldrich (Nelson Rockefeller was named after Aldrich, his maternal grandfather); A. Piatt Andrew, Assistant Secretary of the Treasury and Special Assistant to the National Monetary Commission (the only other NMC member besides Aldrich); and other bankers including Frank Vanderlip, president of the National City Bank of New York; Henry P. Davison, senior partner of J.P. Morgan & Co.; and Charles D. Norton, president of the Morgan-dominated First National Bank of New York.

What came to be known as the Aldrich Plan was drafted by these men during their conference at Jekyll Island. The plan was written in secrecy, as the public would never approve of a banking reform bill written by bankers; much less of a plan for a central bank. The Aldrich Plan was introduced in the U.S. Congress, and followed by much debate, but never came to a vote, because the party in favor of it was voted out, and the Glass-Owens Bill was introduced instead.

The general outline of the Aldrich Plan did eventually serve as the model upon which the Federal Reserve System was created with, however, significant changes that placed control into political hands (via the Board of Governors, selected by the President of the United States), and limited the role of professional bankers in its operation to that of the 12 branches. It met with Warburg’s satisfaction, as he said that minor changes could be adjusted administratively later. The term Central Bank purposely was kept out of its name, as Warburg and others warned it would not be passed otherwise.

A bill creating the Federal Reserve System was approved by Congress three years later, after much heated debate, and signed into law on December 23, 1913 after initial hesitation[citation needed] on the part of President Woodrow Wilson, and after a conference between him and Bernard Baruch,[citation needed] one of his largest campaign donors. The Federal Reserve System is similar to the National Reserve Association proposed by The Aldrich Plan, but with vastly differing management and control.

Strong became President of Banker’s Trust in 1914, and shortly thereafter was appointed Governor of the Federal Reserve Bank of New York the same year, which position he maintained until his death in 1928.

Economic historian Charles P. Kindleberger states that Strong was one of the few American policymakers interested in the troubled financial affairs of Europe in the 1920s, and that had he not died in 1928, just a year before the Great Depression, he might have been able to maintain stability in the international financial system.

Paul Warburg: (Probably the most pivotal “Money Men” character to pay attention to)

Paul Moritz Warburg (August 10, 1868 — January 24, 1932) was a German-American banker and early advocate of the U.S Federal Reserve system.

Warburg was born in Hamburg, Germany, to a successful Jewish banking family. His parents were Moritz and Charlotte (Esther) Warburg. After graduating from the Realgymnasium in Hamburg in 1886 he entered the employ of Simon Hauer, a Hamburg importer and exporter, to learn the fundamentals of business practice. He similarly worked for Samuel Montague & Company, bankers, in London in 1889-90, the Banque Russe pour le Commerce Etranger in Paris in 1890-91.[1][2]

In 1891 Warburg entered the office of the family banking firm of M.M. Warburg & Company, which had been founded in 1798 by his great-grandfather. He interrupted work there to undertake a world tour during the winter of 1891-92. Warburg was admitted to a partnership in the family firm in 1895.[3]

On October 1, 1895, Warburg was married in New York City to Nina J. Loeb, daughter of Solomon Loeb, founder of the New York investment firm of Kuhn, Loeb & Company. The Warbugs were the parents of a son, James Paul Warburg, and a daughter, Dr. Bettina Warburg.

Although a major factor in German finance, after frequent business trips to New York Warburg settled there in 1902 as a partner in Kuhn, Loeb & Company where the influential Jacob Schiff, his wife’s brother-in-law, was senior partner. Warburg remained a partner in the family firm in Hamburg, but he became a naturalized American citizen in 1911. He was a member of Temple Emanu-El in New York City.[5][6]

Warburg was elected a director of Wells Fargo & Company in February 1910. He resigned in September 1914 following his appointment to the Federal Reserve Board, and Jacob Schiff was elected to his seat on the Wells Fargo board.[7]

Paul Warburg became known as a persuasive advocate of central banking in America, in 1907 publishing the pamphlets “Defects and Needs of Our Banking System” and “A Plan for A Modified Central Bank”. His efforts were successful in 1913 with the founding of the Federal Reserve System. He was appointed a member of the first Federal Reserve Board by President Woodrow Wilson, serving until 1918.

In 1919 he founded and became first chairman of the American Acceptance Council. He organized and became the first chairman of the International Acceptance Bank of New York in 1921. International Acceptance was acquired by the Bank of the Manhattan Company in 1929, with Warburg becoming chairman of the combined organization.

He became a director of the Council on Foreign Relations at its founding in 1921, remaining on the board until his death. From 1921 to 1926 Warburg was a member of the advisory council of Federal Reserve Board, serving as president of the advisory council in 1924-26. He was also a trustee of the Institute of Economics, founded in 1922; when it was merged into the Brookings Institution in 1927, he became a trustee of the latter, serving until his death.[8][9]

So you see the connections from the past to the present through Aldrich, Rockefeller, Warburg, The Council On Foreign Relations and the Brookings Institute?

Forbes magazine founder Bertie Charles Forbes wrote several years later:

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 hundred 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… The utmost secrecy was enjoined upon all. The public must not glean a hint of what was to be done. Senator Aldrich notified each one to go quietly into a private car of which the railroad had received orders to draw up on an unfrequented platform. Off the party set. New York’s ubiquitous reporters had been foiled… Nelso (Aldrich) had confided to Henry, Frank, Paul and Piatt that he was to keep them locked up at Jekyll Island, out of the rest of the world, until they had evolved and compiled a scientific currency system for the United States, the real birth of the present Federal Reserve System, the plan done on Jekyll Island in the conference with Paul, Frank and Henry… Warburg is the link that binds the Aldrich system and the present system together. He more than any one man has made the system possible as a working reality.[8] (Emphasis mine)

In the next article in the series, (if you can stand it), we will explore James P. Warburg, the Council On Foreign Relations, the Brookings Institute, Institute For Policy Studies, The United Nations, and whatever else rears it’s ugly head while I am researching.

2 Responses to America’s Economic Collapse: An Intricate Web Of Money, Power and Political Agendas, Part 3
  1. InsightAnalytical-GRL
    January 8, 2009 | 4:14 am

    I was just starting to sleep again…now, PART III!!!!

    Have to read it later…but WILL read it!!!

  2. Bse
    August 12, 2011 | 9:49 pm

    information written in such a perfect

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Monster's Reading List

THE TWO MOST IMPORTANT PIECES TO READ ON THIS SITE:

Tea Party Patriots Vs. The Master Class

Still have that sinking feeling in your midsection every time you think about the District of Criminals, The Fed, Bernanke, etc.?  Are you still not sleeping well at night because you know something is “so wrong” but the scope of the problem is just getting larger each day?

Remember when we spoke about giving up every last penny of our wealth to get rid of the bloodsucking elites that are killing our childrens’ futures?

After reading this commentary, you will have the concise MATH, (there’s that word again), and course of the nation that  explains why you feel like a hamster on crack, and can’t sleep at night.  The numbers do not lie.

This piece is long, it’s brutal, and it will make you weep, but I urge you to read every single word because it will resonate. Remember it when the epitome of the elite class gives his State of The Union Address, and then it will be time to get the little gray cells working because I refuse to allow these bastards to keep raping us into indentured servitude.

America’s Impending Master Class Dictatorship

Copyright 2010 by Stewart Dougherty, with all rights reserved.

FOREWORD: At certain times, focusing on the big picture is important not just for investment success, but for personal welfare, and even survival. We believe such times are here. It is estimated that 98% of Americans have never held a gold coin in their hands. Yet 100% of Americans regularly handle Federal Reserve Notes. From a contrarian standpoint, the financial message from those two statistics is clear. Even so, gold is much more than money or an investment medium; it stands for liberty and throughout history has facilitated escape and ensured freedom. Never having touched a gold coin is the monetary equivalent to never having breathed fresh air, felt the warmth of sunshine, looked up at the stars or risen from the gutter. Fiat Federal Reserve Notes are becoming nothing more than sewage decomposing in the vast, toxic septic tank of predatory Washington politics, epic Federal Reserve arrogance and error, blatant Wall Street fraud and outright Master Class plunder. Below, we outline America’s troubling and compounding predicament, and urge you to think about how to protect yourself from its consequences, both financially and personally.

Thanks to the endless barrage of feel-good propaganda that daily assaults the American mind, best epitomized a few months ago by the “green shoots,” everything’s-coming-up-roses propaganda touted by Federal Reserve Chairman Bernanke, the citizens have no idea how disastrous the country’s fiscal, monetary and economic problems truly are. Nor do they perceive the rapidly increasing risk of a totalitarian nightmare descending upon the American Republic.

One stark and sobering way to frame the crisis is this: if the United States government were to nationalize (in other words, steal) every penny of private wealth accumulated by America’s citizens since the nation’s founding 235 years ago, the government would remain totally bankrupt.

According to the Federal Reserve’s most recent report on wealth, America’s private net worth was $53.4 trillion as of September, 2009. But at the same time, America’s debt and unfunded liabilities totaled at least $120,000,000,000,000.00 ($120 trillion), or 225% of the citizens’ net worth. Even if the government expropriated every dollar of private wealth in the nation, it would still have a deficit of $66,600,000,000,000.00 ($66.6 trillion), equal to $214,286.00 for every man, woman and child in America and roughly 500% of GDP. If the government does not directly seize the nation’s private wealth, then it will require $389,610 from each and every citizen to balance the country’s books. State, county and municipal debts and deficits are additional, already elephantine in many states (e.g., California, Illinois, New Jersey and New York) and growing at an alarming rate nationwide. In addition to the federal government, dozens of states are already bankrupt and sinking deeper into the morass every day.

The government continues to dig a deeper and deeper fiscal grave in which to bury its citizens. This year, the federal deficit will total at least $1,600,000,000,000.00 ($1.6 trillion), which represents overspending of $4,383,561,600.00 ($4.38 billion) per day. (The deficit during October and November, 2009, the first two months of Fiscal Year 2010, totaled $296,700,000,000.00 ($297 billion), or $4,863,934,000.00 ($4.9 billion) per day, a record.) Using the GAAP accounting method (which is what corporations are required to use because it presents a far more accurate and honest picture of a company’s finances than the cash accounting method primarily and misleadingly used by the U.S. government), the nation’s fiscal year 2009 deficit was roughly $9,000,000,000,000.00 ($9 trillion), or $24,700,000,000.00 ($24.7 billion) per day, as calculated by brilliant and well-respected economist John Williams. (www.shadowstats.com) Fiscal Year 2010’s cash- and GAAP-accounting deficits will likely be worse than 2009’s, given government bailout and new program spending that is on steroids and psychotic.

Putting Fiscal Year 2009’s $9,000,000,000,000.00 ($9 trillion) deficit another way, 17% of America’s private wealth, accumulated over a period of 235 years, was wiped out by just one year’s worth of government deficit spending insanity.

Given this, is it any surprise that Treasury Secretary Geithner has announced that the release of the nation’s FY 2009 supplemental GAAP financial statements has been delayed? Remember, this is the same Secretary Geithner who bullied people to cover up the sordid details of the AIG, or more accurately, the taxpayer-funded, multi-billion dollar, Santa Claus bailout and bonus bonanza for Goldman Sachs. Do you really think this government, characterized as it is by fiscal and monetary secrecy, lies, chicanery, cronyism and stonewalling, wants the people to know what is actually happening? Obviously, it does not, so it hides from the public the inexcusable facts.

It is estimated that the top 1% of Americans control roughly 40% of the nation’s wealth. In other words, 3 million people own $21,400,000,000,000.00 ($21.4 trillion) in net private assets, while the other 305 million own the remaining $32,000,000,000,000.00 ($32 trillion). 77,000,000 (77 million) Americans (the lowest 25%) have mean net assets of minus $2,300 ($-2,300.00) per person; they live from paycheck to paycheck, or on public assistance. The lower 50% of Americans own mean net assets of $27,800 each, about enough to purchase a modest car. Obviously, it would be impossible to retire on such an amount without significant government or other assistance. Meanwhile, the richest 10% of Americans possess mean net assets of $3,976,000.00 each, or 143 times those of the bottom 50%; the top 2% control assets worth more than 1,500 times those in the bottom 50%. When you combine these facts with Wall Street’s typical multi-million dollar annual bonuses, you get an idea of wealth inequality in America. Historically, such extreme inequality has been a well-documented breeding ground for totalitarianism.

If the government decides to expropriate (steal) or commandeer (e.g., force into Treasuries) America’s private wealth in order to buy survival time, such a measure will be designed to destroy the common citizens, not the elite. Insiders will be given advance warning about any such plan, and will be able to transfer their money offshore or into financial vehicles immune from harm. Assuming that the elite moves its money to safety, there would then be $120,000,000,000,000.00 ($120 trillion) in American debt and liabilities supported by only $32,000,000,000,000.00 ($32 trillion) in private net worth, for a deficit of $88,000,000,000,000.00 ($88 trillion). In that case, each American would owe $285,714.29 to balance the country’s books.  (Remember to multiply this amount by every person in your household, including any infant children.)

If the common people suspect that something diabolical was in the works, a portion of the $32 trillion in non-elite wealth could be evacuated as well prior to a government expropriation and/or currency devaluation, resulting in less money for the government to steal. What these statistics mean is that it is absolutely impossible for the government to fund its debt and deficits, even if it steals all of the nation’s private wealth. Therefore, the government’s only solutions are either formal bankruptcy (outright debt repudiation and the dismantling of bankrupt government programs) or unprecedented American monetary inflation and debt monetization. If the government chooses to inflate its way out of this fiscal catastrophe, the United States dollar will essentially become worthless. You can be absolutely certain that a PhD. in economics, such as Dr. Bernanke, is well aware of these realities, despite what he might say in speeches. For that matter, so are Chinese schoolchildren, who, when patronized by Treasury Secretary Geithner about America’s “strong dollar,” laughed in his face. One day, perhaps America’s school children will receive a real education so that they, too, will know when to laugh at absurd propaganda.

The government has announced that during the fiscal years from 2010 through 2019, it will create an additional $9,000,000,000,000.00 ($9 trillion) in deficits, an amount that is almost certain to be understated by trillions given the country’s current economic trajectory. The government assumes that this vast additional deficit will be funded by others, such as the Chinese, as it is a statistical fact that the United States will be incapable of funding it.

Furthermore, with the budgetary equivalent of a straight face, the Office of Management and Budget reports in its long-term, inter-generational budget projection that the United States government will experience massive, non-stop deficits for the next 70 (SEVENTY) years, requiring the issuance of tens of trillions of dollars of additional debt. The OMB does not project even one year of surplus during the entire seventy year budget period.

These deficits and debts are now so gargantuan that they have become surreal abstractions impossible even for sophisticated financiers to begin to comprehend. The common citizen has absolutely no idea what these numbers mean, or imply for his or her future. The people have been deluded into thinking that America’s arrogant, egomaniacal, always-wrong-but-never-in-doubt fiscal witch doctors and charlatans, including Greenspan, Rubin, Summers, Geithner and Ponce de Bernanke, have discovered a Monetary Fountain of Youth that endlessly spits up free money from the center of earth, in a geyser of good will toward the United States. Unfortunately, this delusion is false: there is no Monetary Fountain of Youth, and contrary to the apparent beliefs of the self-deified man-gods in Washington, D.C., the debt and deficits are real, completely out of control, and 100% guaranteed to create catastrophic consequences for the nation and its people.

When government “representatives” deliberately sell into slavery the citizens of a so-called free Republic, they have committed treason against those people. This is exactly what has happened in the United States: the citizens have been sold into debt slavery that they and their descendants can never escape, because the debts piled onto their backs can never, ever be paid. Despite expensive and sophisticated brainwashing campaigns emanating from Washington, claiming that America can “grow” out of its deficits and debt, it is arithmetically impossible for the country to do so. The government’s statements that it can dig the nation out of its fiscal hole by digging an even deeper chasm have become parodies and perversions of even totally discredited and morally disgusting Keynesianism.

The people no longer have elected representatives; they have elected traitors.

The enslavement of the American people has been orchestrated by a pernicious Master Class that has taken the United States by the throat. This Master Class is now choking the nation to death as it accelerates its master plan to plunder the people’s dwindling remaining assets. The Master Class comprises politicians, the Wall Street money elite, the Federal Reserve, high-end government (including military) officials, government lobbyists and their paymasters, military suppliers and media oligarchs. The interests and mindset of the Master Class are so totally divorced from those of the average American citizen that it is utterly tone deaf and blind to the justifiable rage sweeping the nation. Its guiding ethics of greed, plunder, power, control and violence are so alien to mainstream American culture and thought that the Master Class might as well be an enemy invader from Mars. But the Master Class here, it is real and it is laying waste to America. To the members of the Master Class, the people are not fellow-citizens; they are instruments of labor, servitude and profit. At first, the Master Class viewed the citizens as serfs; now that they have raped and destroyed the national economy, while in the process amassing unprecedented wealth and power for themselves, they see the people as nothing more than slaves.

America’s public finances are now so completely dysfunctional and chaotic that something far worse than debt enslavement and monetary implosion, terrible curses unto themselves, looms on the horizon: namely, a Master Class-sponsored American dictatorship.

Throughout history, the type of situation in which America now finds itself has been a fertility factory for tyranny. The odds of an outright overthrow of the people by the Washington and Wall Street Axis, or more broadly, the Master Class are increasing dramatically. The fact that so few people believe an American dictatorship is possible is exactly why it is becoming likely.

Dictatorships have blighted history and ruined lives since the beginning of civilization. In recent times alone, tyrants such as Hitler, Stalin, Lenin, Ceausescu, Amin, Hussein, Mussolini, Tojo, Kim, Pinochet, Milosevic, Tito, Batista, Peron, Pol Pot, Mugabe, Marcos, Somoza, Mengistu, Bokassa, Sese Seko, Franco, Ho Chi Minh, Mao, and Castro have power-sprayed blood onto the screen of time and ravaged mankind with murder, torture and human oppression. A full catalog of history’s tyrants would require a book of hundreds of pages. In the past 100 years alone, over 200 million human beings have been annihilated by wars, ethnic cleansings and government assassinations. Just when we think that civilization has been able to rise above tyranny’s inhumanity and disgrace, a new dictator appears on the scene to start the process all over again. Every time this happens, fear and submission paralyze the vast majority of the affected masses, leading them to “follow orders” and lick autocracy’s blood-stained boots.

History has proven to tyrants that oppression works. In fact, it is easy to control a populace, once you control the money, markets, military (including police), media and minions (the recipients of welfare, social security, free health care, government jobs and the like, who are dependent upon the state and likely to be compliant). This is exactly where the United States is today.

Recent American events paint an ominous picture of a Master Class that is now in total control.

When 90% of the American people vehemently rejected the $700,000,000,000.00 ($700 billion) TARP bailout plan, the Master Class put it on a fast track and approved it anyway.

When a clear majority of the American people said no to a government takeover of Chrysler and GM, the Master Class poured billions of taxpayer dollars into those corporate sinkholes and took them over anyway.

When the people said no to multi-trillion dollar crony bailouts for the bankers and insurers whose corruption had caused global financial mayhem, the government pledged to those elite insiders more than $13,000,000,000,000.00 ($13 trillion) of the people’s money anyway.

When the people expressed astonishment and anger that Wall Street planned to pay itself record 2009 bonuses, in the midst of America’s worst-ever fiscal and financial crisis caused by them, Wall Street stuffed its pockets with taxpayer-supported bonus money anyway.

When the people said no to a proposed $40,000,000,000.00 ($40 billion) bailout of AIG and its elite trading partners such as Goldman Sachs (an amount that subsequently exploded to $180,000,000,000.00+ ($180+ billion)), the Master Class went underground, covertly misappropriated taxpayer money and made the payoffs anyway.

When Fannie Mae and Freddie Mac were nationalized at enormous taxpayer expense, the government approved $6,000,000.00 individual pay packages in 2009 (150 times the average American wage) for the CEOs of both failed companies anyway.

When a clear majority of the people said no to nationalized health care, even after being bombarded by a multi-million dollar, lie-drenched propaganda campaign designed to bamboozle them, the House and Senate passed nationalized health care bills anyway.

When more than seven million American workers lost their jobs and were subsisting on unemployment benefits and food stamps, federal government employees, who now earn DOUBLE what private sector workers earn, were given another round of pay and benefits increases anyway.

When private sector workers’ 401Ks and IRA retirement plans plummeted in value due to economic collapse and endemic Wall Street-orchestrated market corruption (including systemic front running, flash trading, naked short selling and other manipulations), government “defined benefit,” lifetime-cost-of-living-adjusted pension plans, despite already being underfunded by $2,000,000,000,000.00 ($2 trillion), were made richer than ever anyway.

The long, shameful litany of events signaling the total divorce between the Master Class and the people of the United States doesn’t stop there. It goes on and on.

The message from the American Master Class to the American people is simple and clear:

We Defy You.

Governments that openly defy the people are either already totalitarian or in the process of becoming so. Monetarily, the United States clearly functions as a totalitarian dictatorship already, with a Federal Reserve that operates in secrecy, creates limitless amounts of debt and currency at will, and showers trillions of dollars upon favored Master Class insiders with zero transparency or accountability whatsoever. The Federal Reserve is so shameless about its dictatorial powers that it flatly refuses to provide details about multi-trillion dollar bailouts and rescues of privileged elites, in open defiance of Congress and the people. The fact that they get away with these blatant acts of defiance demonstrates the true extent of the Master Class chokehold on America.

If the Master Class were a benign despot and if its policies and programs actually worked, that would be one thing. But that is not the case. Rather, its programs are in a complete shambles.

Every single government entitlement program in the United States is bankrupt. This includes Social Security ($17,500,000,000,000.00 underfunded; $17.5 trillion); Medicare Part A ($36,700,000,000,000.00 underfunded; $36.7 trillion); Medicare Part B ($37,000,000,000,000.00 underfunded; $37 trillion); Medicare Part D ($15,600,000,000,000 underfunded; $15.6 trillion), Government and military pensions ($2,000,000,000,000 underfunded; $2 trillion), Food Stamps (current underfunding difficult to measure because the number of recipients is exploding; hundreds of billions underfunded versus original projections, minimum); and the list goes on. The above underfunding amounts are NET of projected tax receipts over the next 50 years. But the current recession has invalidated virtually all long-term budget and tax receipt assumptions, meaning that the true underfunded amounts are now greater than current, already mind-boggling estimates.

While the above statistics are terrifying enough to any citizen with a functioning brain, what is Twilight Zone-eerie and a far more serious cause for alarm is the casual indifference with which the Master Class is now making the country’s dire and irreparable fiscal circumstances even worse.

The nationalized health care program will cost at least $1 trillion over the next ten years, and most likely multiples of that. It is being crammed down America’s throat by a bankrupt government that does not have the money today and will not have the money tomorrow to pay for it. Worse is the fact that the same government that has bankrupted each and every existing social program now intends to directly or indirectly control the health care of all citizens. Based on the government’s existing track record and the health care program’s enormous complexity, invasiveness and cost, the probability that it will become a national fiscal and humanitarian catastrophe is roughly 100%.

“Cap and Trade” is a multi-trillion dollar tax scam being foisted onto the American public without a legitimate debate or popular referendum. You might be surprised to learn that “Climate Revenues” are already included in the federal budget, starting with $79,000,000,000.00 ($79 billion) in fiscal year 2012, which begins only 20 months from now. During fiscal years 2012 through 2019, the government expects to collect $646,000,000,000.00 ($646 billion) in “Climate Revenues,” a completely new tax category. Have any of your elected traitors told you that they have enacted $646,000,000,000.00 ($646 billion) in “Climate” taxes beginning twenty months from now and continuing forever? These “Climate Revenues” are based on junk science, lies and hysteria, and have been pimped by greed-diseased parasites who seek to make billions from operating and manipulating the Cap and Trade “marketplace.” Favored elitists such as Hank Paulson, Al Gore, General Electric and Goldman Sachs, among others, have positioned themselves to profit from the nation’s upcoming Cap and Trade tax misery and economic debilitation.

The reality is that the giant Ponzi scheme called the United States of America is running out of money. In any Ponzi scheme, money must constantly be poured into the top of the funnel in order to pay the redeemers at the bottom. As the number of redeemers has grown, tax receipts have fallen far short of covering their withdrawals, a problem that has now become an outright government funding emergency further aggravated by the fiscal, financial and economic crises.

If the Washington and Wall Street Axis were not legally able to create and distribute counterfeit American money, the Ponzi scheme would have collapsed already. Trillions of new, out-of-thin-air, printing-press and electronic “dollars” have bought the Axis additional time, but new sources of revenue must immediately be found to keep the scam alive. Congress is fully aware of this reality. Outright tax increases would be bad politics during a recession that is morphing into a depression, and also bad for 2010 re-election campaigns, so they cannot be implemented. Therefore, Congress continues to advance the health care and Cap and Trade agendas, which are nothing but taxation Trojan Horses festooned in righteousness and sanctimony, despite overwhelming popular opposition.

If the nationalized health care program is passed, revenues and fees will kick in immediately in 2010, whereas costs will not begin to accrue until 2012 and later. The government plans to spend the revenues immediately to forestall a total fiscal collapse. Nationalized health care has absolutely nothing to do with health care; it has to do with creating an immediate revenue stream to help fix the current government funding crisis. Similarly, Cap and Trade has nothing to do with fixing the environment. It, too, is nothing more than a massive tax increase similarly designed to address the government’s epic funding shortfall, with thick slices of pork thrown  in for privileged insiders and deceitful propagandists like bloated “Father of the Internet” and now “Savior of the World” Al Gore.

The last thing the Master Class wants is for the people to understand the disastrous state of the nation’s finances. Master Class brainwashing tells the people that it is “negative” and “pessimistic” to look at the facts, despite the fact that psychological health is characterized by the ability to identify and deal with reality. The Master Class wants the people to put on Bozo the Clown happy faces and let sugar plums and green shoots dance in their brains as they write one check after another to pay for Cap and Trade, nationalized health care, and a mind-numbing assortment of other taxes and fees.

On Sunday night, November 30, 2009, North Korea’s dictator Kim Jong Il (a name that says it all, even better than Made-off’s), an international poster child of Master Class psychological illness, devalued his country’s currency by 99%. This vicious tyrant, who has given birth to a national hell on earth, is chauffeured in Mercedes Benz limousines, drinks the finest imported whiskies and dines in imperial dignity on foods prepared by personal chefs while his citizens starve to death on the streets or, at best, eke out a subsistence living. Kim became paranoid that the people were actually figuring out how to improve their pitiful, impoverished lives in tiny ways, so he decided to wipe them out. The people were given one week to exchange their money at a rate of 100 old Won for 1 new Won. Any lifetime family savings in excess of roughly $700.00 were simply confiscated by the North Korean government. To keep the people in line, the military and police were put on high alert, fully prepared to kill or arrest any protesters.

On January 9, 2010, Venezuela’s strong man Hugo Chavez devalued his country’s currency by 50%, overnight and without warning, causing immediate inflation, shortages of food and supplies, and general financial chaos throughout the nation.

While you might be shaking your head in pity over the plight of the citizens of North Korea and Venezuela, ask yourself this: could this not happen in the United States?

On April 5, 1933, President Franklin D. Roosevelt, an Obama hero, outlawed gold ownership overnight by signing Executive Order 6102, which gave the people three and one-half weeks to surrender all privately-owned bullion to the government for a price of $20.67 per ounce. On January 30, 1934, nine months after collecting the people’s gold, Roosevelt devalued the dollar 69% overnight, by raising the gold price from $20.67 to $35.00 per ounce.

Since its founding in 1913, the Federal Reserve has devalued the dollar by 98+% thanks to endless money printing and debt creation, a corrosive and impoverishing process that is now accelerating. In the past year, the Fed has engineered $20+ trillion in bailouts, subsidies and guarantees for well-connected and lucky scavengers and opportunists, an amount equal to roughly 40% of the total private wealth created in this country since its inception. All because a few elitist government man-gods with an almost perfect record of error and failure have deemed in their imperial wisdom that it shall be so. The citizens, whose hard-earned wealth is being systematically destroyed by this continual, government-decreed monetary debasement were never invited to the debate or given a say, which is par for the course for dictatorships. This massive de facto devaluation now hangs over the people’s wealth like a great monetary sword of Damocles.

Conceptually, whether it is a 50% overnight devaluation in Venezuela, a 69% overnight devaluation in the United States, a 98% devaluation in America over time, or a 99% overnight devaluation in North Korea, what is the difference? The fact is: there is no difference; monetary debasements are all the same. In each and every case, the people’s wealth is stolen via government edict, while the people stand by helplessly and in shock.

So one must ask: For whom does the bell toll? A foreign “them,” or a domestic us? Who is to say that you will not be told tomorrow morning that, effective immediately, in accordance with some perversely named mandate such as the “American Monetary Security, Wealth Preservation and Terrorism Prevention Act,” enacted by emergency for “the safety of the nation and the financial well being of the citizens,” all existing currency and bank balances will be redenominated in “New Dollars,” at a conversion rate of 1 new for every 100 old currency units? Would this not simply be another, almost predictable act of defiance toward the American people by the Master Class? And if that happened, do you honestly believe that the Master Class would not have been alerted in advance and allowed to make special preparations for itself ahead of the devaluation? Do you think they intend to go down in the same ship as the people they defy? If such a currency devaluation were announced, what could you do about it? March on Washington? But how would you get there if your money had been wiped out?

Despite what you may hear from State Media, which includes virtually all establishment news organizations, particularly financial ones (e.g., CNBC), America is on the precipice. No bankrupt nation in history has ever defended or preserved the freedoms of its citizens. In fact, it has been the exact opposite: in desperation, bankrupt governments have routinely plundered their citizens’ wealth and imposed totalitarian controls. What will make things different for the United States, the largest debtor nation in all of recorded civilization?

The United States government cannot ever, possibly pay its debts, is pathologically incapable of controlling its spending or curbing its hunger for both domestic and international empire and persistently refuses to tell the American people the truth. If America’s citizens were told the truth and given the benefit of true leadership, as opposed to the guile and dishonesty of an endless array of political liars and hacks, perhaps they could rally and defeat the problems that afflict them. But instead, they are fed by the Master Class a steady diet of narcotic propaganda that deludes, confuses and enervates them. The truth cannot set people free if it is never told, and that is the essence of America’s gathering tragedy.

In a future article, we will detail specific developments you should watch for to chart the course of America’s ominous and potentially deadly national storm. The current, grave situation is already a clear call to action. When the signals become even more urgent, it will be late in the game to take protective action, and possibly too late. Citizens should begin to prepare now not just for financial survival, but for the personal security of themselves and their loved ones should a Category 5 economic and political hurricane rip into the nation, something that becomes more likely every day.

With respect to personal finances, in virtually every national currency devaluation and major political upheaval in the past, gold has represented sanctuary for the affected people. Gold has not just preserved wealth, but personal freedom as well. While governments can devalue fiat currencies, they cannot, by edict, devalue gold. Yes, they can try to manipulate its price, but unless all governments join in the collusion, ultimately the price will return to market. The market for gold is global, and demand exists in all nations and among all peoples. Should the government attempt to confiscate gold, it will be an outright admission that the financial system is collapsing, and the people will know better than to hand over to a corrupt government their only means of survival. The most important point is this: devalued currencies never rise again. Once they are destroyed, they are gone forever, and those whose wealth had once been denominated in them are wiped out. As you have no doubt heard before, not one fiat currency has survived over time, and that is an indisputable fact. More significantly, no fiat currency has ever suffered the abuse that has been inflicted upon the United States dollar, meaning that it is at extreme risk. Gold has been money for 5,000 years. It has not merely survived, it has prevailed over each and every fiat currency collapse throughout history. Given this, the most important financial question a person can ask him- or herself today is: How is my wealth denominated at this time? And given its denomination, is my wealth likely to be safe in current and evolving circumstances?

One thing is certain: as the epic David and Goliath monetary battle unfolds, between the people fighting to defend their hard-earned wealth on one side, and a Master Class that greedily and pathologically wants to plunder them on the other, the price of gold will become extremely volatile for a period of time. Volatility will, in fact, tell you that the War on Wealth has officially been declared, and will be your signal to do whatever you must to protect what is yours. As the government Goliath and its Master Class allies short tonnes of bullion into rigged futures markets in a desperate attempt to make gold look dangerous and risky, the Davids will be coming forth not just in the United States but from all corners of the globe, buying 10 grams here and one ounce there. There are 6.8 billion Davids, versus one diseased Master Class that numbers in the small millions. There is no way the Master Class can defeat the people, if the people finally rise up and say “No More of Your Plunder. No More of Your Cold and Soulless Financial Oppression. No More of Your Cynical and Godless Exploitation.”

If you find the above argument compelling, you should consider how to protect yourself from Executive Orders that could be issued at any time, under any pretext, and that could be extremely hostile to your financial and/or personal health and well being. One simple way to start is to purchase one ounce of gold for yourself and each member of your household, and much more if you can afford it. That is not financial advice; it is merely the common sense generously communicated to you by history.

Stewart Dougherty

Stewart Dougherty is a specialist in inferential analysis, the practice of identifying historic and contemporary patterns and then extrapolating their likely effects upon the future. Dougherty was educated at Tufts University (B.A., magna cum laude), and Harvard Business School (M.B.A. and an academic Fellow). He can be reached at stewartdougherty@cs.com. He is not affiliated with or compensated by those he references or recommends. He does not offer investment or trading advice, and nothing in this article should be construed as such. This article represents the author’s personal opinions, and nothing more. The reader has the author’s permission to share, print, forward or post this article provided that the content is not changed and the author is acknowledged.

(H/T Mike)

Big Brother’s Lock On Your Money Is Complete

I wrote about it; I tried to warn people, but after the healthcare fight we just went through, I think most people just wanted a breather from battling the fascists in Washington (to our long-lasting detriment).

Now we have the financial reform bill that includes the new federal agency Office Of Financial Research, and the Bureau of Consumer Protection keeping track of every single financial transaction you could possibly imagine; including your bank balance, and when you walk to the ATM to take cash out.  I wasn’t lying, but I do think I was one of very few writing about it.

The fascists have the banks, the insurance companies, the credit card companies, the car companies, OUR healthcare, and now Americans’ financial transactions.

Senate Democrats Pass Bill Allowing Govt to Collect Addresses, ATM Records of Bank Customers

(CNSNews.com) – Senate Democrats united to pass a financial regulatory bill that allows the government to collect data on any person operating in financial markets at any level, including the collection of personal transaction records from local banks, including customers’ addresses and ATM receipts. (emphasis mine)

The Senate voted 59-39 on Thursday to pass the bill – the chief aim of which is to more-heavily regulate the financial industry – sending it to a conference committee in the House of Representatives, where differences between the House and Senate versions will be ironed out.

The bill, if it becomes law, will create the Bureau of Consumer Financial Protection and empower it to “gather information and activities of persons operating in consumer financial markets,” including the names and addresses of account holders, ATM and other transaction records, and the amount of money kept in each customer’s account.

The new bureaucracy is then allowed to “use the data on branches and [individual and personal] deposit accounts … for any purpose” and may keep all records on file for at least three years and these can be made publicly available upon request.

*break*

Shelby slammed the new consumer bureaucracy, saying that it was meant not to protect consumers but to “manage” them by monitoring their behavior.

“Mr. President, make no mistake, behind the veil of anti-Wall Street rhetoric is an unrelenting desire to manage every facet of commerce under the guise of consumer protection.

“They may be interested in protecting consumers, but they are more interested in managing them,” Shelby said.

Shelby also criticized the idea that Americans need government to watch over their every financial move, saying that it was better to allow people the freedom to make their own choices and fail than to never allow them the freedom to choose at all.

“Mr. President, I have faith in the American people and their ability to make good choices,” said Shelby.  “Granted, we do not always choose well.  But I believe that a poor choice freely made is far superior to a good choice made for me.”

“I am afraid that the architects of this bill do not share this sentiment,” he said. “Nor do they share my faith in the American people.”

Shelby further said that the ability of the Federal Reserve to collect such detailed information about the most basic of financial transactions was the beginning of an effort by government to regulate every financial action of every American citizen.

“This new consumer bureaucracy is intended by its architects in the Treasury to begin the process of financial regulation with the intent of changing the behaviors of the American people,” said the senator.

Shelby appears to be correct. The bill allows the bureau to collect any and all information on any person operating in the financial markets.

As it reads: “[T]he Bureau shall have the authority to gather information from time to time regarding the organization, business conduct, markets, and activities of persons operating in consumer financial services markets.”

Meanwhile, depending on the conference version of this bill, you may be able to fund a new federal agency that takes idle appropriations, invests them, and keeps the profits.  Those profits are ‘not considered the government’s property’. I am still trying to ascertain who that money actually belongs to because it is not yours anymore.

4.15.2010

Obama Turns Financial Reform Into A Political Fight

I am currently reading this bill and wanted to drop an interesting tidbit on you. For those interested in reading the 114 page Manager’s Amendment, go here. I am only a couple hundred pages into this POS but starting on page 60, a new government office is to be established. The “Office Of Financial Research” will be part of the Treasury, and will have a Director appointed by the President and confirmed by the Senate. This office will also have a data collection center to keep track of all financial and nonbank financial institutions so as to be able to report to Congress on companies that ‘threaten’ the economy. It is unclear how big or how many new government employees this office will create, but considering how events are unfolding now with Obamacare, I’m assuming pretty large.

The interesting tidbit pertains to the Financial Research Fund that is to be established and the ability of the Office that is providing Congress with reports to invest monies they aren’t using. Let me know if you think that’s a conflict of interest, and if you would like to know exactly how much money that is?

“Funds obtained by, transferred to, or credited to the Financial Research Fund shall be immediately available to the Office, and shall remain available until expended, to pay the expenses of the Office in carrying out the duties and responsibilities of the Office.”

The above quotes are from Chris Dodd’s markup draft. I went to the actual amended bill (Amendment No. 3739 of Bill S. 3217) that was passed and found the pertinent information starting on page 62, with the investment and non-governmental monies section on page 78. It’s still in there.

At this point, the underground economy is about to get a bit larger.

UPDATE: More information on the Office Of Financial Research, here.

Words Of Wisdom....

The end of democracy and the defeat of the American Revolution will occur when government falls into the hands of lending institutions and moneyed incorporations.

- Thomas Jefferson

Thomas Jefferson And American Sovereignty

"On every question of construction carry ourselves back to the time when the Constitution was adopted, recollect the spirit manifested in the debates and instead of trying what meaning may be squeezed out of the text or invented against it, conform to the probable one in which it was passed."

--Thomas Jefferson, letter to William Johnson, 1823

It is the sacred principles enshrined in the United Nations Charter to which the American people will henceforth pledge their allegiance.

- President George Bush (41) addressing the United Nations

Which will it be America? US Sovereignty or UN Slavery? - The Monster

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