Obama and The Federal Reserve’s Hidden Taxes

G. Edward Griffin is a national treasure…

People think that the Federal Reserve System was created by the government as a means of controlling and regulating the banks, but in reality, the Federal Reserve System was created by the banks as a means of controlling and regulating the government and that’s the reality of today. – G. Edward Griffin


A reader sent me an article that looked at the discussion surrounding the tax cuts Americans have received as part of the Porkulus bill and how the GOP and FoxNews have been able to make a majority of Americans believe there has not been any tax cuts from the Obama Regime.

The point of this article is to show how TPTB still have the moos discussing tax cuts instead of the underlying hidden tax that has been occurring since the inception of the Federal Reserve System in 1913. A discussion about tax cuts or extending the Bush tax cuts is ridiculous when we have a private banking cartel in place that controls 100% of the money in the system, will collect $396 Billion in interest this year, and is on track to charge us $1 Trillion dollars in interest on our own money in 2011.  The END OF THE FED absolutely has to happen; no ifs, ands, or buts; or this country will not survive hosting a parasite of The Fed’s size.

NY Times:

From Obama, the Tax Cut Nobody Heard Of

After further prodding — including a reminder that a provision of the stimulus bill had cut taxes for 95 percent of working families by changing withholding rates — Mr. Paratore’s memory was jogged.

In a troubling sign for Democrats as they head into the midterm elections, their signature tax cut of the past two years, which decreased income taxes by up to $400 a year for individuals and $800 for married couples, has gone largely unnoticed.

American Spectator:

Spending Equals Taxes, Obama Tax Cut Edition

The first is that during Obama’s first two years taxes have in fact gone up. The stimulus tax cuts are only one of many changes to the tax code. Americans for Tax Reform reports that the 111th Congress enacted $352 billion in net tax hikes. Although most of those taxes are obscure and will not take effect as immediately as the stimulus tax cuts have, there can’t be any doubt that they have shaped the public’s understanding of the tax outlook. After all, cigarette smokers and tanning salon patrons — who will suffer large targeted tax increases — number in the millions.

$6.99 (2008), On sale 10.13.2010 for $12.99 (Monster's Local Grocery Store)

Before the Income Tax by G. Edward Griffin

This report is adapted from two earlier articles by G. Edward Griffin appearing in the April 13, 1987 and February 29, 1988 issues of THE NEW AMERICAN. Mr. Griffin, a journalist and film producer, is the author of The Creature From Jekyll Island: A Second Look at the Federal Reserve.

It is a sobering thought that the federal government could operate – even at its current level of spending –
without collecting any taxes whatsoever.  All it has to do is create new money through the Federal Reserve System, a process called monetizing the debt. As a matter of fact, much of the money it now spends is obtained that way. The politicians who authorize that process know that this is not true debt, because no one in Washington really expects to repay it. It is merely a means of raising money to run the government without increasing taxes. Actually, the inflation that results from monetizing debt is just as much a tax as any other, but, because it is hidden and so few Americans understand how it works, it is far easier to collect than a tax that is out in the open.


$2.89 (2008), $6.19 10.13.2010 (Monster's Local Grocery Store)

So the question arises: Why does the federal government bother with taxes at all? Why not just operate on monetized debt? The answer is twofold. First, if it did, people would begin to wonder where the money is coming from, and that might cause them to wake up to the reality that inflation is a tax. Thus, open taxes, at some level at least, serve to perpetuate public ignorance regarding the reality of deficit spending. But the second reason is more to the point of this report. It is that taxes, particularly progressive taxes, are weapons by which social planners can wage war on one class of citizens for the benefit of another.

G. Edward Griffin on Ron Paul’s HR 1207, Ending the Fed, and Returning to the Gold Standard

Excerpt from the video:

Then some years later, a lady who was the president of a local activist group in the Los Angeles area asked me if I would come to her group and give a speech on taxes. I said, “I didn’t know much about taxes except they were too high and I was against them, but what else can I say? But however, I can perhaps say something intelligent on that hidden tax called inflation. Would you be interested in that?”

And she said, “Oh, sure.”

So then what I did was I cobbled together a talk on that topic and it was well received and they encouraged me to put it on the road, which I did and that grew into an all-day seminar called “A Crash Course on Money”, and I was really having a good time putting that seminar on and then finally one day I looked in the mirror and I looked at myself and said, “You know, Edward. You don’t really know enough about the real markets out there. You know about inflation and the banking system, but people were asking me what to do with their money.”

They thought because I knew about the Federal Reserve, that I was, you know, a kind of a person that could tell them how to protect themselves from inflation and what kind of investments to make and all that sort of thing, which I was not qualified to do. So I stopped the seminars and I enrolled in a school. That was the College for Financial Planning in Denver and I attended that for a couple of years and I got my certificate, not because I wanted to be a financial planner, which I didn’t and am not, but I got my certificate to be one, and my goal was just to learn about the real markets and what investments were and so forth.

So and then I started to do research for the book and that took seven more years and so as you can see it was a long story. Finally, I finished the book in 1994 and it’s been kind of an amazing carriage ride ever since then because I thought that nobody really was that interested in reading about Federal Reserve system, but to my amazement, the book had sold very well and it’s been selling even better of late now that we’ve got this financial meltdown. We’re now at 24th printing of the book. Every time we print it, I update it somewhat and try to, you know, bring the statistics up to date and replace the old names with the new names, but the story doesn’t change.

So that’s the story behind it, and so what is the story about what the Fed is? What I discovered, Gary and you know it so well, is that the Federal Reserve system is not what it appears to be at all. It’s one of the greatest, what shall I say is, it’s an impostor that you could ever imagine. It pretends to be a government agency. It pretends to be an institution of public spirited servants who were defending the economy of the American people and trying to stabilize the purchasing power of the dollar and all of those things, when it is none of those things.

In fact, what I discovered is that the Federal Reserve system, instead of being a government agency is really a cartel. It’s a cartel just like a banana cartel or an oil cartel or a sugar cartel. It happens to be a banking cartel and the purpose of any cartel, regardless of what its public pronouncements are, the purpose of any cartel is to expand and enhance the benefit of the members of the cartel. And so the Federal Reserve chairman and the boards of all these Federal Reserve system banks around the country, they have one primary objective and that’s to enhance the benefit of the banks.

It wouldn’t go over too well if they said that in their public pronouncements and so they say other things. They say, “Well, we raised interest rates today because we want to put a lid on inflation because inflation is bad for you, folks.”

Now, they said that always they’re doing it for us, you see, and nevertheless, that’s wonderful. I’m glad we’ve got these wise and benevolent leaders doing all that for us, but when in reality, if the chairman said, “Well, we raised interest rates today because we taught we could get away with it and enhance the profits of the banks”, that wouldn’t go over too good.

So anyway, the first thing I learned about the Federal Reserve System was shocking and that is it wasn’t what it appeared to be. It was a cartel and what they did is they wrote their own cartel agreement and then they brought the government into it. They influenced politicians, that’s another story as to how they did that, but they got the politicians to take their cartel agreement and enact it into law. They called the cartel agreement the Federal Reserve Act and now all of the banks and all the financial institutions have to comply with the cartel agreement or they go to jail.

So it’s just the opposite of what it appears to be. People think that the Federal Reserve System was created by the government as a means of controlling and regulating the banks, but in reality, the Federal Reserve System was created by the banks as a means of controlling and regulating the government and that’s the reality of today. I used to say that and people thought I was a wingnut of some kind, but now it’s out in the open and you can see it.

The banks are in trouble and so instead of helping the people, they’re fleecing the people, taking their money from them and giving it to the banks, all in the name, of course, of helping the people. So in a nutshell, that’s the story.

Gary Franchi: This is not the first Central Bank for the United States. There’s been a battle over this for years.

G. Edward Griffin: That’s right. We’ve had three of them.

Gary Franchi: Three, and this is the third one.

G. Edward Griffin: Yeah.

Gary Franchi: How do we get to this? I mean, those other banks, they disappeared. Their charters expired and we’re trying to do the same thing now with this Federal Reserve by introducing audits, abolishing the Board of Governors.

G. Edward Griffin: Well, excuse me. Excuse me, Gary. They didn’t just expire because they got tired and worn out. They expired because there was strong political opposition and Congress refused to renew their charters. It was a battle in both cases.

Gary Franchi: So now…

G. Edward Griffin: And these guys just don’t go away.

G. Edward Griffin: So now, we have this Federal Reserve, this Central Bank in its current formation. It doesn’t have a charter that could ever come for expiration? I mean, they must have… they obviously planned that out.

G. Edward Griffin: Right. All right. It doesn’t have an expiration date or a renewal date, but, of course, it can be rescinded at any time. Congress created the Federal Reserve through an act of Congress. Well, Congress can undo the act. They can just, you know, get rid of it. They can abolish it anytime they want to.

But, of course, of course, they don’t want to because most of these congressmen are so intimately connected with this system. They benefit from it. The key players in this whole financial structure are some of the biggest contributors to the campaign funds for these politicians and they’ve got little side [views].

Gary Franchi: Plus they have all the pork they pad into their bills. I mean, that pork could not otherwise be funded if there wasn’t a Federal Reserve to do so, am I right?

G. Edward Griffin: And that’s absolutely correct, yeah. And I’m not sure that many congressmen think about that, but they just know instinctively that they don’t want to touch the Federal Reserve System. It’s a big, powerful creature and they don’t want to do battle with it and they know that somehow they benefit from it.

Gary Franchi: So let’s go back to 1913. Who were the gentlemen that came together, I would like to call them the guilty party, who were these people who came together to create this creature?

G. Edward Griffin: Well, that’s a very interesting topic in itself. At the time that the Federal Reserve Act was passed into law in 1913, there was a lot of conversation in the press and in public discussions about the Money Trust. The Money Trust was kind of a code name that was used in those days to describe the consortium of big, powerful banks and insurance companies in New York that controlled the credit and the money flow of the nation, and the purpose of the Federal Reserve System supposedly was to break the grip of that group.

Well, the truth of the matter is that that’s exactly the group that wrote the Federal Reserve Act to make sure that their grip would never be broken and in fact, to make sure that their grip would be transferred into law, so that anybody trying to break their grip would go to jail as I mentioned a moment ago.

So who were these people? There were seven of them, Gary. The first one was Nelson Aldrich, he was a senator. He was the Republican whip in the Senate. He was probably the most powerful of the politicians at the time next to the President. He was the chairman of the National Monetary Commission, which is the committee of Congress that drafted the Federal Reserve Act. He was a business associate of JP Morgan. He was father-in-law to John D. Rockefeller, Jr. He was tied up in all the financial dealings in New York and very intimately connected with them, a very wealthy person, and you can imagine he’s just the kind of guy who is going to break the grip of the Money Trust. He was number one.

Number two was Abraham Piatt Andrew. He was the Assistant Secretary of the Treasury at that time, which doesn’t describe him too well because it makes him sound like he was a bureaucrat or a politician. His primary connection through family and business experience is banking. He really came from the banking family. He’s very close to Wall Street and that’s the reason he was Secretary of the Treasury.

The third person there was Frank Vanderlip who was president of the National City Bank of New York, which is the most powerful of all the banks at that time and he represented the financial interest of William Rockefeller and the international investment banking house of Kuhn, Loeb, and Company.

The fourth one there was Henry P. Davidson. He was the senior partner of the JP Morgan Company and Charles D. Norton was in that group and he was president of JP Morgan’s First National Bank of New York, another one of the giants.

The sixth person was Benjamin Strong. He was head of JP Morgan’s Bankers Trust and he eventually became the first head of Federal Reserve System.

And finally the seventh person and probably the most knowledgeable of the group in terms of central banking, which is an institution that came from Europe, was Paul Warburg. He was a co-partner in Kuhn, Loeb and Company. He was actually a representative of the Rothschild banking dynasty in England and France, and throughout all this period, he maintained a very close relationship to his brother Max Warburg who was the head of the Warburg banking consortium in Germany and the Netherlands.

So those were the seven people that went to Jekyll Island in 1910 in a highly secret environment there and hammered together all the essential features of what became the Federal Reserve Act and those seven men, according to estimates of the period, Gary, controlled either directly through their own wealth or through the institutions that they represented, they controlled about one-fourth of the wealth of the entire world at that time.

Gary Franchi: Wow.

G. Edward Griffin: So if there was ever a Money Trust, this was it, and the people of America have no idea that this institution called the Federal Reserve System, which we are told is a means of controlling the big, bad bankers and breaking the grip of the Money Trust was actually the creature of the Money Trust and still is so today.

Gary Franchi: So we have… I mean, we’re talking about the bankers creating something to control themselves, which they control, which is completely ludicrous. So now, we’ve got, you know, you see it. You see Goldman Sachs bankers coming and sitting in as treasury secretaries. You know, they recruit everybody from Wall Street to come and sit. It’s like everyone is going to get a turn as a Federal Reserve…

G. Edward Griffin: Man, it’s a big revolving door.

Gary Franchi: Yeah, it’s just a revolving door.

G. Edward Griffin: Yes.

Gary Franchi: It’s just a front and the Fed just continues, “Look, hey, you know what? You need some cash. Let’s pump it into the system for you.”

7 thoughts on “Obama and The Federal Reserve’s Hidden Taxes

  1. I know Hawaii is suppose to be paradise but how in the world do you shop at these prices. I would have to give up coffee and that would not be a pretty site.

    Prices are going up where I am but nothing like what you are paying, I shop mostly specials and am always on the look out for buy one get one free. At least I feel if I am vigilant I will get the best deals I can.

    Forget gold buy coffee.

    1. I don’t buy coffee when it is $14.99 a can. I either buy coffee (cheap brand) from Costco (saving my family’s life right now) or I buy 10 cans of coffee when it’s on sale for $8.00. My extra cash isn’t in silver or gold – it’s in food.

      I haven’t shopped in a normal grocery store (except for things I cannot find at Costco) in over a year.

      These prices are the reason I am so adamant about getting rid of the Fed and the leeches on Wall Street that are creating the interest that you, I, and our descendants will be paying for centuries. No freakin’ joke. $202 Trillion in debt? How long to pay that off with interest?

      1. I shop the same way , if it is on sale I buy in bulk, I just can not believe how much more your prices are. I understand the whole getting to you but really I think there might be something else going on.

        I recently had a conversation with a younger person who was really upset about the attitude of people not paying their mortgage when they could pay. While I totally agree, this person was surprised when I said the banks lend us money that they do not have and charge interest, I think this might be why people are starting to not care about holding up their end of the contract. I would never advocate this kind of behavior but I am starting to understand the thinking.

        1. The something else you think may be going on is the Jones Act that requires all ships to have union labor. That is one reason why everything is so expensive, #2 is that there are only 2 or 3 companies that do all the shipping – another monopoly.

          As for people not paying their mortgages, how hard is it to do the right thing for most people when we have been ridden roughshod for so many decades. They don’t care anymore.

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