The History of the Federal Reserve (our central bank):

Many might not know this, but the Federal reserve is not the only Central Bank this country has known. In fact, it is the third.

The First Bank was a bank chartered by the United States Congress on February 25, 1791. The charter was for 20 years. The Bank was created to handle the financial needs and requirements of the central government of the newly formed United States, which had previously been thirteen individual colonies with their own banks, currencies, financial institutions, and policies. The First Bank held its charter from 1791-1811 (wikipedia)

After much push to eliminate The First Bank from Thomas Jefferson during his presidency from 1801-1809, the bank lost its charter by 1 vote in the House of Representatives under President James Madison in 1811. Thomas Jefferson was quoted, saying, "The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered."

The Second Bank (of the United States) was chartered by many of the same congressmen who in 1811 had refused to renew the charter of the original Bank of the United States. The predominant reason that the Second Bank of the United States was chartered was that in the War of 1812, the U.S. experienced severe inflation and had difficulty in financing military operations. Subsequently, the credit and borrowing status of the United States were at their lowest levels since its founding. (wikipedia) The Second Bank of the United States held its charter

In 1819 the Supreme Court ruled The Second Bank of the United States unconstitutional, limiting its powers on money production and taxation. While it was able to finish its charter term of 20 years, The Second Bank of the United States did not earn a second charter. In 1941, soon after John Tyler took over the Presidency, Congress passed a bill to reestablish The Second BUS (Bank of the Unites States). President Tyler vetoed the bill along with a second such bill, calling them unconstitutional and against states' rights. That led to the creation of a new banking system called the Independent Treasury System. On February 25, 1862, under President Abraham Lincoln, The Legal Tender act was passed allowing the secretary of the treasury to issue paper money (to be backed with gold and silver). This eliminated a long standing problem of having too many currencies circulating the US. This system lasted until 1913...until...

The Federal Reserve:
In the early 1900's, the people of the US were vary weary of the concept of a central banking system. J.D. Rockefeller, J.P. Morgan, Baron Rothschild, & Paul Warburg were the 4 businessmen that developed and wrote the plan for the Federal Reserve to be created. They were the leaders of the banking world during that era. They used their business influence at the time to manipulate the economy and spread rumors about insolvent banks to create the need of a new national bank.

J.P. Morgan was investigated for the Fraud of the rumors spread in 1907. The person in charge of the investigation was Senator Nelson Aldrich who had intimate ties to the banking community and later became part of the Rockefeller family through marriage. After his investigation of J.P. Morgans (false) rumors, his suggestion was that a central bank needed to be created to avoid a repeat of the panics of 1907.

President Woodrow Wilson ran for office with heavy backing from the bankers - promising ahead of time to sign the Federal Reserve Act in exchange for campaign support. Two days before Christmas in 1913, when most of congress was at home with their families, the Federal Reserve Act was voted in and President Wilson made it law.

However, in 1919 Woodrow Wilson was quoted in regret, “I am a most unhappy man, I have unwittingly ruined my country. A great industrial nation is now controlled by its system of credit. We are no longer a government by free opinion, no longer a government by conviction and the vote of majority, but a government by the opinion and duress of a small group of dominant men.”

Congressman Louis McFadden also stated in 1913 after the passing of the bill, “A world banking system was being set up here…a superstate controlled by the international bankers…acting together to enslave the world for their own pleasure. The Fed has usurped the government.”

The people of the US were told the Federal Reserve was an economic stabilizer and inflation and economic crisis' were a thing of the past. As we now know, nothing could be further from the truth.

From 1914-1919 the FED increased the money supply by nearly 100% using extensive loans to small banks and the public. In 1920, they called in a major of the outstanding money supply. This forced the small banks to call in their loans. Bank runs, bankruptcies and business collapses occurred at historical levels. Over 5400 independent small banks (outside the Federal Reserve system) went out of business, giving more power to the FED.

Noticing the atrocious crime by the FED, Charles Lindbergh stated in 1920, “Under the Federal Reserve act, panics are scientifically created. The present panic is the first scientifically created one, worked out as we figure a mathematical equation.”

Again, from 1921 to 1929 the FED increased the money supply in the country by 62% - sparking the economy with extensive loans to the banks and businessmen. They also helped create a new type of loan on Wall Street, called a margin loan. This allowed a person to put just 10% down on a stock with the other 90% loaned through the stock broker - giving 100% control of that stock. In other words, A person could own $1000 worth of stock by putting only $100 down! This was a major influence to the stock market boom of the 1920's. However, there was a catch to this "too good to be true" loan. A 24 hour margin call could occur at any time. If that happened, it had to be paid within 24 hours by whomever owned the stock.

Ironically, a couple of months before October in 1929 J.D. Rockefeller and his constituents exited the market. On October 24, 1929, the New York financiers who furnished the margin loans started calling them in in mass. This required selling off of margin loans in mass and in turn cause massive bank runs and bankruptcies, collapsing 16,000 more private banks. This allowed the conspiring international bankers to buy up rival banks and corporations at pennies on the dollar. Then, instead of expanding the money supply to deal with the economic collapse, the FED actually contracted the money fueling one of the largest depressions in history.

Congressman Louis McFadden had this to say about the collapse in 1929, “It was a carefully contrived occurrence. International bankers sought to bring about a condition of despair, so that they might emerge the rulers of us all.” Ironically, after 2 previous assassination attempts on the congressman's life, they finally succeeded and Louis McFadden was poisoned at a banquet before he could push for the impeachment of the FED.

To complete the execution of the financial independence of the United States citizens, the Federal Reserve bankers decided the gold standard should be removed. So, with executive order from President Franklin D. Roosevelt, under the pretense of "helping to end the depression", all people were required to turn in their gold coin, bullion and certificates with a penalty of 10 years imprisonment if they didn't turn it in by May 1, 1933. Basically, robing the public of what little wealth they had left...

With the FED now in control of printing "legal tender" without the backing of a gold standard, they had control of the countries money supply. The power to regulate the money supply is the power to regulate its value - which is also the power to bring an economy to its knees.

The Federal reserve is a PRIVATE corporation. They make their own policies and have very little regulation from the US Government. It is important for the people of this country to understand that the Federal Reserve is about as federal as Federal Express shipping. They exist to make money. All money they make is loaned to our government with interest attached. This is exactly the type of system that Thomas Jefferson and James Madison tried to avoid because they know what it would lead to.

Now let me get off track for a minute. In 1913, the Federal Reserve act was not the only act unconstitutionally pushed through. They also pushed through the Federal Income Tax bill. The reason our Federal Income tax is unconstitutional is because it is a direct unapportioned tax on our income.
Here is what the original constitution said in Section 2:
"Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union..."

However, in 1913, the 16th Amendment was pushed through!
Amendment 16 - Status of Income Tax Clarified. Ratified 2/3/1913.
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

While you would think the 16th Amendment changes the constitution and makes our Federal Income Tax legal, the 16th Amendment was actually never ratified by the required number of states to put it into law. This fact has been cited in modern court cases - "If you...examined (the 16th amendment) carefully, you would find that a sufficient number of states never ratified that amendment." - U.S. District Court Judge, James C. Fox, 2003

Why do I bring this up and tie the two together? Well, notice they Federal Reserve and and Federal Income Tax law were passed at the same time. On average 35% of peoples incomes are taken from this tax. That mean you work 4 months of the year to pay the government. You know where you money was designed to go? To pay the interest the Federal Reserve charges our government for loaning the money. It is the biggest fraudulent system EVER created and it is crippling our economy.

Now, this has been a slow slide down-hill for the FED. While they did recall all the gold in 1933 - eliminating the gold standard, they actually did remain fiscally responsible for a fairly long period of time keeping the cash supply in circulation proportionate to our gold reserves. Because of this the Bretton Woods act of 1944 made the US Currency the legal tender in all international matters - reinstating the gold standard in modified terms. However, in 1971, due to the expenses incurred in Vietnam, the United States was broke! And President Richard Nixon diverted from the economic policy that had been in place since the 1944 Bretton Woods act, using a great argument that it was in the best interest for our economy because of issues in the world at that time.



Where are we now?
Well, in summary, from 1914-1919 the FED increased the cash supply by nearly 100% only to recall much of the excess money causing a short depression and major business and economic chaos forcing 5400 private banks to collapse, gobbling up more monetary power in the process. However, that wasn't the end. From 1921-1929 the FED again increased the cash supply in the country by 62%. This time, Wall Street got involved and started making margin loans, making matters worse. The great depression, which I am convinced was set up by the major businessmen in the country at that time, set up a collapse of the final leg of the banking system (causing 16,000 banks to fail) as it used to be - giving the Federal Reserve absolute monetary power when they abolished the gold standard in 1933 to help "ease" the great depression they created.

In the past 2 years, the Federal Reserve has increased the money supply by 120%... What happens next? As you have probably read in past blog posts by me, the last time this happened was in the 1970's when the FED increased the cash supply by 13% during Jimmy Carter's administration. That led to record high interest rates to correct the problem. We now have increased the cash supply almost 10x more then they did in the 70's.

Many people say we have been here before and we will be fine... The problem to that argument is that times are different. When all of this happened in the teens and twenties of the 20th century, we were a lot more solid financially. We were a country of production and savings. Even in the late 70's we were much better off. Then it was only the beginning of the process. The U.S.' debt as a percentage to the GDP was only 33% at that time. Now our national debt as a percentage to GDP is over 90%. Not to mention the cash supply issue is FAR greater now than it was then. For too long now (40 years) we have been functioning as a bankrupt society - surviving only on the price fixing by the Federal Reserve (interest rate control) and the debt we have incurred in the process. The stakes are much higher now than they were back then. The people of the United States are in such cumulative debt that a needed correction to the dollar would cripple the economy, force millions (not just 5,400 or 16,000) of businesses and banks to fail and cause a far greater depression then the world has ever known. In my estimation from all of the research I have been doing, it is not a matter of if, it is a matter of when.

What can you do?
Well, I am still working on that one :-). From what I have gathered so far, precious metals like silver and gold. DON'T simply buy silver or gold certificates through brokerage houses. Companies like J.P. Morgan have had to make settlements in class action suits against them claiming J.P. Morgan was not actually warehousing the physical silver people owned with the silver certificates purchased through their firm. This actually means that the supply/demand ratio of silver is off balance and when all this comes to light I think silver is greatly undervalued. Not to mention, historically, gold and silver have had a 16:1 ratio. Right now they are operating at a 62:1 ratio. Something is off there. I have read a lot of information about invest in C.R.I.B. funds (China.Russia.India.Brazil), but I don't have much info on that at this time. However, I can tell you that I think gold and especially silver are where you want to invest and have on hand. If the U.S. economy does collapse, silver and gold will most likely be the basis on which a new currency is valued. After all, there has never been a currency in the HISTORY of the world that has survived without having gold or silver as it's backer.