The Constitution of the United States clearly states that only Congress shall have the power to create money and regulate the value thereof:
BY MELVIN J. HOWARD
But that is really not the case today, it is actually created and regulated by a privately owned company that controls and profits by printing money through the Treasury, and regulating its value. What is the private company that prints U.S. dollars? It is the Federal Reserve Bank (the Fed). Most people think the Fed is a government arm. Its name is misleading. It says ‘Federal’ yet it is not federal at all. It is a fully private corporation. It also says ‘Reserve’, yet it has no reserves. The money is printed literally and completely out of nothing, not backed by any value or gold. It is one of the most secretive and controversial institutions today, the truth behind it becoming only recently clear to an increasing number of people. The Fed began when, in 1914 and after trying to do so unsuccessfully several times before due to opposition, about 300 people and banks put together just $100 each and formed the Federal Reserve Banking System. These people and bankers formed and still form part of the top 2% of the world’s wealthiest and powerful people. The Fed is one of the most profitable companies in the world. It also collects billions of dollars in interest annually, interest charged to the U.S. government. The history of its formation is filled with controversy, with many experts having the opinion that Congress gave the Fed the right to print money in ways contrary to the Constitution. This is how, the Fed works: The Fed prints money, and loans it back to the U.S. and other governments, and charges interest on the currency. It buys government debt with money it simply creates, and charges interest to U.S. taxpayers. The ownership of the Fed has always been kept a closely guarded secret. In fact, even their books and detailed accounts are kept secret. My interest in the Fed or the monetary system in general is more curiosity and the study to find out why there are so many disparities among the haves and have-nots. Whether people care to admit or not racism played a big role in those disparities in early America that has had a profound effect on the outcomes of families today. The end of the civil war marked the time when the fight for equality took full swing. After the war southern state legislators, dominated by former confederates, passed laws known as black codes that severely limited the rights of blacks. The codes known as the Jim Crow laws were slightly different from state to state but they usually contained limitations on black occupations and property owning.
From the Servicemen’s Readjustment Act, known as the G.I. Bill of Rights, Voting Rights Act, and Homestead Act etc. Most would be surprised today that it was the Republicans in response to these laws, that Congress, in 1866 seized the initiative of the remaking of the south. The Republican Congress at that time, wanted to ensure that the south was correctly rebuilt with the newly freed blacks as visible members of society. Now lets get back to who owns the Fed. It is not very easy to get information on exactly who or whom owns the Fed (because the Fed doesn’t publish a detailed list of its owners) But this is what I did come up with based on the last time the ownership of the Fed was investigated the following emerged as the main direct or indirect (through cross holdings etc) owners of the Federal Reserve Bank:
- Rothschild Bank of London
- Warburg Bank of Hamburg
- Rothschild Bank of Berlin
- Lehman Brothers of New York
- Lazard Brothers of Paris
- Kuhn Loeb Bank of New York
- Israel Moses Seif Banks of Italy
- Goldman, Sachs of New York
- Warburg Bank of Amsterdam
- Chase Manhattan Bank of New York
- Citibank
- Morgan Guaranty Trust
- Chemical Bank
- Manufacturers Hanover Trust
- Bankers Trust Company
- National Bank of North America
- Bank of New York
What is interesting is that these big banks work together in various aspects and they are connected to the old and established London Banking Houses ever since the beginning. There is only a small but powerful group of individuals who own significant shares in these banks. This gives them ownership of the Fed through their ownership of the banks that have shares in the Fed (the Fed’s shares are not publicly traded but are sold only to member banks). The Fed system was set up in 1914 after several failed attempts. The people and their leaders throughout the years, by presidents and congressional representatives alike, had always opposed the bankers in favor of this system. But in 1913, Senator Nelson Aldrich, the maternal grandfather to the Rockefellers, pushed the Federal Reserve Act through Congress just before Christmas during which time much of Congress was on vacation.
According to some historians, the bankers also funded Woodrow Wilson’s campaign and when he became president, he passed the Federal Reserve Act in 1914, an act he is later on record as having regretted its passing. A few Presidents, such as Lincoln, Jackson, and Kennedy, have tried to change this system but encountered too much opposition from other politicians, banks and corporations. Here is an idea lets give the task of printing U.S. dollars to the government itself, the money can be issued without anyone charging ‘interest’ for it, since it would be the government itself printing the money. To simple you say it is just that simple!
The Fed’s relationship with the government is very loose. As a private company, it is not required to disclose much to the public. It is run by a powerful group of people who are free from the usual restrictions of governmental checks and balances. Its Board of Governors is independent of the government and its governors hold office for far longer than any U.S. President does. It is also self- financing (actually it is one of the most profitable corporations in the world) and so does not rely on the national budget (the primary tool of control that Congress uses to influence agencies and other bodies). It operates outside of the national budget (in fact finances it) and so has monetary autonomy as well. In its task of regulating the money supply, it is completely independent of the government and is only ‘required’ to make decisions that will be in line with the nation’s economic policy.
The Federal Reserve Act was drafted in the Jekyll Island Conference, which was arranged for by powerful banking families, individuals and their corporations (such as J. P. Morgan Co., the Rothschilds, the Rockefellers, and Kuhn, Loeb & Co). The ownership of the Federal Reserve at the top level has not changed much in the years with successive generations within the controlling families simply inheriting that ownership or extending it under a different company name.
The Federal Reserve System is actually ‘split’ up into several components. There are 12 regional Federal Reserve banks, the most powerful one by far being the New York Federal Reserve Bank. Each of these 12 Feds is organized as a private corporation, just like any other private corporation. The Federal Reserve System is controlled by the Board of Governors (the Board) and the Federal Open Market Committee the (FOMC). The Board has seven members who are appointed by the President of the United States and approved by the senate. The Board determines the interest rate for loans, sets the deposits reserve ratio, which significantly affects a bank’s ability to create new credit, and decides how much new currency Federal Reserve Banks will issue annually. The FOMC is made up of members of the Board, the president of the New York Federal Reserve Bank, and four presidents from other regional Federal Reserve Banks. The FOMC sets the open market policy which determines how much in government bonds the 12 Federal Reserve Banks (all private for-profit institutions) may buy or sell (this is the major tool of monetary policy). There is also a Federal Advisory Council that is comprised of 12 representatives, one from each of the 12 Federal Reserve Banks.
This council meets at least 4 times a year with the Board to advise it on and discuss general economic issues. To summarize, every single part of the Fed is private – they are all private for-profit corporations (the Fed is one of the most profitable corporation in the world). The only part of this system that is in any way ‘public’ is the Board, which comprises 7 people appointed by the U.S. President. How neutral is the Board? The Federal Advisory Council that advises the Board in at least 4 meetings a year, despite the use of the word ‘Federal’ in the name, is comprised of 12 bankers representing each of their private Federal Reserve banks. The Federal Reserve Banks themselves despite the use of the word ‘Federal’ in their name are not federal at all in any sense. And they no longer keep any reserves (the gold reserves we abandoned long ago and cash reserves don’t exist because cash is printed anytime anyway).
A considerable amount of effort is made to conceal the power and composition of the Fed. Naturally, considering that the owners of the Fed are private individuals (through banks they own) and also have huge stakes in corporations in all sectors of the economy especially in the media, pharmaceutical, food and defense industries, and considering that great profits can and are made by those who know what will be in the papers months in advance, secrecy is an asset. Even internationally, they will then directly and indirectly, through its influence on organizations such as the IMF, World Bank and U.S. government, set conditions and guarantees for the loans it issues.
Lets look at an example and how this works first they log into their computer terminals, and create $20 billion, and ‘wire’ it to X Country’s bankers. That $20 billion is added to the U.S. expenditure and if, as it usually is, it is out of the budget, it becomes a debt that the U.S. government owes the Fed and which the Fed collects interest on. X Country now owes the U.S. government, which in turn owes the Fed. Now let us see how it is repaid back. X Country will shoulder one part of the debt while the other part is shouldered by the U.S. taxpayers (40% of tax goes towards debt servicing). In the U.S., the debt is held by the government and owed to the Fed. So the U.S. government collects directly from X Country over time. Meanwhile, it has to pay back the Fed using taxpayer’s money.
This doesn’t make sense because the Fed just printed the money anyway they didn’t get gold for it or anything like they used to – but that is the way the system is set up today. So in effect, the Fed makes free money at their discretion, holds none of the risk, does none of the work (the people of X Country and America work and pay), and is in truth one of the most profitable corporations worldwide. Why shouldn’t it be? After all, it is the corporation with the monopoly of making and regulating U.S. dollars!
