The Purpose of the Federal Reserve Is To Prevent Any Real Reform

This Week in Money Sept 3–9

This Week In Money helps you discover the history of economics.

SEPTEMBER 3

1940 — BIRTH OF EDUARDO HUGHES GALEANO, URUGUAYAN JOURNALIST, WRITER AND NOVELIST “The system steals with one hand what it lends with the other.”

2014 — “CENTRAL BANK MONETARY POLICY ENABLES US TO PUT OFF REAL REFORMS” ARTICLE BY CHARLES HUGH SMITH “I finally figured out that the core purpose of central banks’ monetary policy is to enable vested interests to avoid desperately needed reforms in the real economy. This might have been blindingly obvious to others, but I finally caught on to the dismaying reality: the only purpose of central bank monetary policy is to keep the bloated, corrupt, inefficient and self-liquidating vested interests of the state-cartel crony capitalism from having to suffer the consequences of real reforms. … “In the U.S., we need look no farther than higher education, sickcare and national defense for state-cartels systems operating to benefit vested interests. The Federal Reserve’s policies of zero-interest rates (ZIRP) and free money for financiers have enabled these corrupt, self-serving, parasitic sectors to maintain their skims and bloated cost structure–but at the cost of hollowing out the economy and increasing the risk that the financial Ponzi scheme will collapse in a heap of leveraged phantom assets. http://www.washingtonsblog.com/2014/09/central-bank-monetary-policy-enables-us-put-real-reforms.html

2018 — “WHY SO LITTLE HAS CHANGED SINCE THE FINANCIAL CRASH,” POSTED ARTICLE BY MARTIN WOLF, ASSOCIATE EDITOR AND CHIEF ECONOMICS COMMENTATOR AT AT THE FINANCIAL TIMES “But good ideas do exist. A more likely cause of inertia is the power of vested interests. Today’s rent-extracting economy, masquerading as a free market, is, after all, hugely rewarding to politically influential insiders. “Yet the centre’s complacency invites extremist rage. If those who believe in the market economy and liberal democracy do not come up with superior policies, demagogues will sweep them away. “A better version of the pre-2008 world will just not do. People do not want a better past; they want a better future.” https://www.ft.com/content/c85b9792-aad1-11e8-94bd-cba20d67390c?fbclid=IwAR05SDOOvaStDymxn3fIojU_wpKe88PIdxAIgMDlKe8B7I3Z62k1ln01yUY

2020 — ICE CUBE (RAPPER, ACTOR, FILM PRODUCER) ON TWITTER ON CURRENCY CREATION “America is a currency creator so there’s no reason for people to live like this. Government and the banks have made a deal to keep the people in debt. They always say if you print money it will cause inflation. They just printed 3 trillion. Little or no inflation.” https://twitter.com/icecube/status/1301549370173579265?s=19&fbclid=IwAR2axK175rICrk-cfKW55NXN7j5dAQzIVMtXtvKEhIM7Dy8_EJT7PZknCHs

SEPTEMBER 4

2013–10 YEAR OLD EXPLAINS THE TRUTH ABOUT WHERE MONEY COMES FROM… (SHORT VIDEO) “No matter how many economists are working on the problem, they’ll never solve it because they’re missing the most important piece of the puzzle. ‘But once this missing piece is found, even a 10 year old can understand it.”

2014 — QUESTIONS AND ANSWERS ON INDEPENDENCE AND MONETARY REFORM — VIDEO Skip to 2:21:50 for the start of the question and answer session on how Scotland can change the banking and monetary system — not only in their own country but in setting a model for the world in democratizing money creation

2019 — CHRISTINE LAGARDE, EUROPEAN CENTRAL BANK PRESIDENT NOMINEE ON CURRENCY “The currency is a public good that belongs to the People” Quote during a hearing at the European Parliament’s ECON Committee https://twitter.com/PositiveMoneyEU/status/1173980223429316609

2023 — LABOR DAY IN THE UNITED STATES Begun by President Cleveland in 1894 as a means to distract attention and break solidarity of US workers from workers around the world that celebrated worker progress and activism on May Day (May 1). The enactment of the National Emergency Employment Defense (NEED) Act, HR 2990 in a previous Congress, would have created millions of jobs. The jobs would focus on repairing our nation’s infrastructure. The debt would not need to be raised. Taxes would not need to be imposed. Funding from any other public program would not have to be shifted. Public creation and circulation of U.S. money is all that would be required. Just as the colonists did when fighting the British. Just as President Lincoln did during the 1860 when creating Greenbacks. Just as economists proposed under the “Chicago Plan” during the 1930’s to President Roosevelt to move the nation out of the Great Depression. For more information on the NEED Act, go to http://www.monetary.org/ The NEED Act has been updated. It’s the American Monetary Reform Act (AMRA) https://www.monetaryalliance.org/wp-content/uploads/AMRA-Fact-Sheet.pdf

SEPTEMBER 5

1927 — BIRTH OF PAUL VOLKER, FORMER CHAIR OF THE FEDERAL RESERVE BOARD QE3 (the third round of Quantitative Easing — the creation and distribution of money by the Federal Reserve, which went largely to financial and other corporations) is the “most extreme easing of monetary policy” that he could ever remember. “Another round of QE is understandable — but it will fail to fix the problem. There is so much liquidity in the market that adding more is not going to change the economy.”

2016 — REPORT ON SOVEREIGN MONEY COMMISSIONED BY ICELAND’S PRIME MINISTER IS RELEASED “On September 5th, the consulting company KPMG released a new report commissioned by the Prime Minister of Iceland aiming to clarify the main features of a sovereign money system as advocated by the IMMR. The launch event in Reykjavik featured a very supportive speech from the Financial Times’ chief economists commentator Martin Wolf and was commented by the Governor of the Central Bank of Iceland. “One knows a subject is being taken seriously when the world’s biggest consultancies and accountancy firms such as KPMG start looking at them. The monetary reform movement just passed this milestone this week after KPMG Iceland released a new report entitled “Money Issuance: Alternative Monetary Systems”. The ~40 page report (pdf) was commissioned by the Prime Minister’s office. It provides an overview of the sovereign money proposal, including a summary of the latest political developments and the academic debate. While the report is quite accessible to read, it does not provide any recommendations on whether sovereign money should be implemented or not.” http://internationalmoneyreform.org/blog/2016/09/kpmg-iceland-report-sovereign-money/

SEPTEMBER 6

1877 — NEW YORK TIMES ARTICLE ANNOUNCING FORMATION OF FARMER’S ALLIANCE IN LAMPASES, TX Farmers in the West and South organized to collectively sell their produce, educate one another on economic and political issues and take political action. Among the central issues explored by Alliances and the later Populist Party were the issues of banking and money creation. They supported the creation of postal savings banks. The Northern Alliance of farmers favored overwhelmingly reinstating government issuance of money (i.e. the Greenback during the Lincoln administration) while the Southern Alliance supported the creation of a “sub-treasury” in which the government would create an “elastic” money supply that would stretch to meet emergencies and contract again when the need passed. It could be founded on a commodity possessed by every farmer — grain. The money supply would expand or contract depending on the harvest, but would circulate just like any money.

1943 — DEATH OF RICHARD MCKENNA, FORMER PRESIDENT, MIDLANDS BANK OF ENGLAND “I am afraid that the ordinary citizen will not like to be told that the banks can and do create and destroy money. And they who control the credit of a nation direct the policy of governments, and hold in the hollow of their hands the destiny of the people.” (From a 1924 speech)

1951 — BIRTH OF WILLIAM BLACK, AMERICAN LAWYER, ACADEMIC, AUTHOR AND FORMER BANK REGULATOR “The best way to rob a bank is to own one.”

SEPTEMBER 7

1867 — BIRTH OF JP MORGAN, JR, BANKER Morgan was instrumental in providing financing to several nations during World War I, including loans and other financial support to France, England and Russia. Accusations were made that this financial commitment led him to influence the Wilson Administration to enter the war.

2006 — STATEMENT OF NOURIEL ROUBINI, US ECONOMIST Roubini warns the International Monetary Fund about a coming US housing crash, failures of mortgage-backed securities failures, bank failures, and a major recession. His work was based partly on his study of recent economic crises in Russia (1998), Argentina (2000), Mexico (1994), and Asia (1997). His warnings proved to be correct.

2013 — DEATH OF ALBERT BARTLETT, EMERITUS PROFESSOR OF PHYSICS AT THE UNIVERSITY OF COLORADO AT BOULDER “The greatest shortcoming of the human race is our inability to understand the exponential function.” [Note: Exponential growth requires exponential resources — which are finite. If we have no energy, we have no economy. Also, exponential growth is mandatory under a debt-based money system since exponential natural resources must absolutely be plundered to produce endless stuff to sell to pay off the endless compounding/exponential interest connected to the endless debt. Multiple crashes are inevitable.]

2021 — “THE ‘MAGIC’ OF COMPOUND INTEREST IS ACTUALLY JUST WAGE-SLAVERY FOR SOMEONE ELSE” ONLINE ARTICLE “‘Oooh, wow, the magic of compound interest!” said my childhood self. “Just invest your money and it will magically grow year after year:… “There’s no such thing as putting your money to work for you. “You’re just using your capital advantage to put someone else to work for you, flaying a profit off the back of someone else’s time, talent, energy, and effort.” https://survivingtomorrow.org/the-magic-of-compound-interest-is-actually-just-wage-slavery-for-someone-else-7c98edcd0c33

SEPTEMBER 8

1999 — DEATH OF HERBERT STEIN, FORMER CHAIRMAN OF PRESIDENT’S COUNCIL OF ECONOMIC ADVISORS “If something cannot go on forever, it will stop.” [Note: Sounds like our current debt-based money system — an unsustainable system which can only continue if more debt is issued, which happens by banks when they issue loans and purchase treasury bonds, bills and notes]

SEPTEMBER 9

1801 — DEATH OF ROBERT YATES, POLITICIAN AND JUDGE “I can scarcely contemplate a greater calamity that could befall this country, than be loaded with a debt exceeding their ability ever to discharge. If this be a just remark, it is unwise and improvident to vest in the general government a power to borrow at discretion, without any limitation or restriction.” — Brutus pseudonym, probably Robert Yates

1828 — BIRTH OF LEO TOLSTOY, RUSSIAN WRITER AND SOCIAL REFORMER “Money is a new form of slavery, and distinguishable from the old simply by the fact that it is impersonal, there is no human relation between master and slave.”

1890 — BIRTH OF MARRINER S. ECCLES, FORMER CHAIRMAN AND GOVERNOR OF THE FEDERAL RESERVE SYSTEM “That is what our money system is. If there were no debts in our money system, there wouldn’t be any money.”

This Week In Money by Greg Coleridge helps you discover the history of economics. Get TWIM delivered directly to your email inbox for free.