Does a shadowy group of obscenely wealthy elitists control the world? Do men and women with enormous amounts of money really run the world from behind the scenes? The answer might surprise you. Most of us tend to think of money as a convenient way to conduct transactions, but the truth is that it also represents power and control. And today we live in a neo-fuedalist system in which the super rich pull all the strings. When I am talking about the ultra-wealthy, I am not just talking about people that have a few million dollars. As you will see later in this article, the ultra-wealthy have enough money sitting in offshore banks to buy all of the goods and services produced in the United States during the course of an entire year and still be able to pay off the entire U.S. national debt. That is an amount of money so large that it is almost incomprehensible. Under this ne0-feudalist system, all the rest of us are debt slaves, including our own governments. Just look around – everyone is drowning in debt, and all of that debt is making the ultra-wealthy even wealthier. But the ultra-wealthy don’t just sit on all of that wealth. They use some of it to dominate the affairs of the nations. The ultra-wealthy own virtually every major bank and every major corporation on the planet. They use a vast network of secret societies, think tanks and charitable organizations to advance their agendas and to keep their members in line. They control how we view the world through their ownership of the media and their dominance over our education system. They fund the campaigns of most of our politicians and they exert a tremendous amount of influence over international organizations such as the United Nations, the IMF, the World Bank and the WTO. When you step back and take a look at the big picture, there is little doubt about who runs the world. It is just that most people don’t want to admit the truth.
The ultra-wealthy don’t run down and put their money in the local bank like you and I do. Instead, they tend to stash their assets in places where they won’t be taxed such as the Cayman Islands. According to a report that was released last summer, the global elite have up to 32 TRILLION dollars stashed in offshore banks around the globe.
U.S. GDP for 2011 was about 15 trillion dollars, and the U.S. national debt is sitting at about 16 trillion dollars, so you could add them both together and you still wouldn’t hit 32 trillion dollars.
And of course that does not even count the money that is stashed in other locations that the study did not account for, and it does not count all of the wealth that the global elite have in hard assets such as real estate, precious metals, art, yachts, etc.
The global elite have really hoarded an incredible amount of wealth in these troubled times. The following is from an article on the Huffington Post website…
Rich individuals and their families have as much as $32 trillion of hidden financial assets in offshore tax havens, representing up to $280 billion in lost income tax revenues, according to research published on Sunday.
The study estimating the extent of global private financial wealth held in offshore accounts – excluding non-financial assets such as real estate, gold, yachts and racehorses – puts the sum at between $21 and $32 trillion.
The research was carried out for pressure group Tax Justice Network, which campaigns against tax havens, by James Henry, former chief economist at consultants McKinsey & Co.
He used data from the World Bank, International Monetary Fund, United Nations and central banks.
But as I mentioned previously, the global elite just don’t have a lot of money. They also basically own just about every major bank and every major corporation on the entire planet.
According to an outstanding NewScientist article, a study of more than 40,000 transnational corporations conducted by the Swiss Federal Institute of Technology in Zurich discovered that a very small core group of huge banks and giant predator corporations dominate the entire global economic system…
An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.
The researchers found that this core group consists of just 147 very tightly knit companies…
When the team further untangled the web of ownership, it found much of it tracked back to a “super-entity” of 147 even more tightly knit companies – all of their ownership was held by other members of the super-entity – that controlled 40 per cent of the total wealth in the network. “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network,” says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.
The following are the top 25 banks and corporations at the heart of this “super-entity”. You will recognize many of the names on the list…
1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
4. AXA
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
9. UBS AG
10. Merrill Lynch & Co Inc
11. Wellington Management Co LLP
12. Deutsche Bank AG
13. Franklin Resources Inc
14. Credit Suisse Group
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
17. Natixis
18. Goldman Sachs Group Inc
19. T Rowe Price Group Inc
20. Legg Mason Inc
21. Morgan Stanley
22. Mitsubishi UFJ Financial Group Inc
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation
The ultra-wealthy elite often hide behind layers and layers of ownership, but the truth is that thanks to interlocking corporate relationships, the elite basically control almost every Fortune 500 corporation.
The amount of power and control that this gives them is hard to describe.
Unfortunately, this same group of people have been running things for a very long time. For example, New York City Mayor John F. Hylan said the following during a speech all the way back in 1922…
The real menace of our Republic is the invisible government, which like a giant octopus sprawls its slimy legs over our cities, states and nation. To depart from mere generalizations, let me say that at the head of this octopus are the Rockefeller-Standard Oil interests and a small group of powerful banking houses generally referred to as the international bankers. The little coterie of powerful international bankers virtually run the United States government for their own selfish purposes.
They practically control both parties, write political platforms, make catspaws of party leaders, use the leading men of private organizations, and resort to every device to place in nomination for high public office only such candidates as will be amenable to the dictates of corrupt big business.
These international bankers and Rockefeller-Standard Oil interests control the majority of the newspapers and magazines in this country. They use the columns of these papers to club into submission or drive out of office public officials who refuse to do the bidding of the powerful corrupt cliques which compose the invisible government. It operates under cover of a self-created screen [and] seizes our executive officers, legislative bodies, schools, courts, newspapers and every agency created for the public protection.
These international bankers created the central banks of the world (including the Federal Reserve), and they use those central banks to get the governments of the world ensnared in endless cycles of debt from which there is no escape. Government debt is a way to “legitimately” take money from all of us, transfer it to the government, and then transfer it into the pockets of the ultra-wealthy.
Today, Barack Obama and almost all members of Congress absolutely refuse to criticize the Fed, but in the past there have been some brave members of Congress that have been willing to take a stand. For example, the following quote is from a speech that Congressman Louis T. McFadden delivered to the U.S. House of Representatives on June 10, 1932…
Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks. The Federal Reserve Board, a Government board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. The depredations and iniquities of the Federal Reserve Board has cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States, has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it.
Sadly, most Americans still believe that the Federal Reserve is a “federal agency”, but that is simply not correct. The following comes from factcheck.org…
The stockholders in the 12 regional Federal Reserve Banks are the privately owned banks that fall under the Federal Reserve System. These include all national banks (chartered by the federal government) and those state-chartered banks that wish to join and meet certain requirements. About 38 percent of the nation’s more than 8,000 banks are members of the system, and thus own the Fed banks.
According to researchers that have looked into the ownership of the big Wall Street banks that dominate the Fed, the same names keep coming up over and over: the Rockefellers, the Rothschilds, the Warburgs, the Lazards, the Schiffs and the royal families of Europe.
But ultra-wealthy international bankers have not just done this kind of thing in the United States. Their goal was to create a global financial system that they would dominate and control. Just check out what Georgetown University history professor Carroll Quigley once wrote…
[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.
Sadly, most Americans have never even heard of the Bank for International Settlements, but it is at the very heart of the global financial system. The following is from Wikipedia…
As an organization of central banks, the BIS seeks to make monetary policy more predictable and transparent among its 58 member central banks. While monetary policy is determined by each sovereign nation, it is subject to central and private banking scrutiny and potentially to speculation that affects foreign exchange rates and especially the fate of export economies. Failures to keep monetary policy in line with reality and make monetary reforms in time, preferably as a simultaneous policy among all 58 member banks and also involving the International Monetary Fund, have historically led to losses in the billions as banks try to maintain a policy using open market methods that have proven to be based on unrealistic assumptions.
The ultra-wealthy have also played a major role in establishing other important international institutions such as the United Nations, the IMF, the World Bank and the WTO. In fact, the land for the United Nations headquarters in New York City was purchased and donated by John D. Rockefeller.
The international bankers are “internationalists” and they are very proud of that fact.
The elite also dominate the education system in the United States. Over the years, the Rockefeller Foundation and other elitist organizations have poured massive amounts of money into Ivy League schools. Today, Ivy League schools are considered to be the standard against which all other colleges and universities in America are measured, and the last four U.S. presidents were educated at Ivy League schools.
The elite also exert a tremendous amount of influence through various secret societies (Skull and Bones, the Freemasons, etc.), through some very powerful think tanks and social clubs (the Council on Foreign Relations, the Trilateral Commission, the Bilderberg Group, the Bohemian Grove, Chatham House, etc.), and through a vast network of charities and non-governmental organizations (the Rockefeller Foundation, the Ford Foundation, the World Wildlife Fund, etc.).
But for a moment, I want to focus on the power the elite have over the media. In a previous article, I detailed how just six monolithic corporate giants control most of what we watch, hear and read every single day. These giant corporations own television networks, cable channels, movie studios, newspapers, magazines, publishing houses, music labels and even many of our favorite websites.
Considering the fact that the average American watches 153 hours of television a month, the influence of these six giant corporations should not be underestimated. The following are just some of the media companies that these corporate giants own…
Time Warner
Home Box Office (HBO)
Time Inc.
Turner Broadcasting System, Inc.
Warner Bros. Entertainment Inc.
CW Network (partial ownership)
TMZ
New Line Cinema
Time Warner Cable
Cinemax
Cartoon Network
TBS
TNT
America Online
MapQuest
Moviefone
Castle Rock
Sports Illustrated
Fortune
Marie Claire
People Magazine
Walt Disney
ABC Television Network
Disney Publishing
ESPN Inc.
Disney Channel
SOAPnet
A&E
Lifetime
Buena Vista Home Entertainment
Buena Vista Theatrical Productions
Buena Vista Records
Disney Records
Hollywood Records
Miramax Films
Touchstone Pictures
Walt Disney Pictures
Pixar Animation Studios
Buena Vista Games
Hyperion Books
Viacom
Paramount Pictures
Paramount Home Entertainment
Black Entertainment Television (BET)
Comedy Central
Country Music Television (CMT)
Logo
MTV
MTV Canada
MTV2
Nick Magazine
Nick at Nite
Nick Jr.
Nickelodeon
Noggin
Spike TV
The Movie Channel
TV Land
VH1
News Corporation
Dow Jones & Company, Inc.
Fox Television Stations
The New York Post
Fox Searchlight Pictures
Beliefnet
Fox Business Network
Fox Kids Europe
Fox News Channel
Fox Sports Net
Fox Television Network
FX
My Network TV
MySpace
News Limited News
Phoenix InfoNews Channel
Phoenix Movies Channel
Sky PerfecTV
Speed Channel
STAR TV India
STAR TV Taiwan
STAR World
Times Higher Education Supplement Magazine
Times Literary Supplement Magazine
Times of London
20th Century Fox Home Entertainment
20th Century Fox International
20th Century Fox Studios
20th Century Fox Television
BSkyB
DIRECTV
The Wall Street Journal
Fox Broadcasting Company
Fox Interactive Media
FOXTEL
HarperCollins Publishers
The National Geographic Channel
National Rugby League
News Interactive
News Outdoor
Radio Veronica
ReganBooks
Sky Italia
Sky Radio Denmark
Sky Radio Germany
Sky Radio Netherlands
STAR
Zondervan
CBS Corporation
CBS News
CBS Sports
CBS Television Network
CNET
Showtime
TV.com
CBS Radio Inc. (130 stations)
CBS Consumer Products
CBS Outdoor
CW Network (50% ownership)
Infinity Broadcasting
Simon & Schuster (Pocket Books, Scribner)
Westwood One Radio Network
NBC Universal
Bravo
CNBC
NBC News
MSNBC
NBC Sports
NBC Television Network
Oxygen
SciFi Magazine
Syfy (Sci Fi Channel)
Telemundo
USA Network
Weather Channel
Focus Features
NBC Universal Television Distribution
NBC Universal Television Studio
Paxson Communications (partial ownership)
Trio
Universal Parks & Resorts
Universal Pictures
Universal Studio Home Video
And of course the elite own most of our politicians as well. The following is a quote from journalist Lewis Lapham…
“The shaping of the will of Congress and the choosing of the American president has become a privilege reserved to the country’s equestrian classes, a.k.a. the 20% of the population that holds 93% of the wealth, the happy few who run the corporations and the banks, own and operate the news and entertainment media, compose the laws and govern the universities, control the philanthropic foundations, the policy institutes, the casinos, and the sports arenas.”
Have you ever wondered why things never seem to change in Washington D.C. no matter who we vote for?
Well, it is because both parties are owned by the establishment.
It would be nice to think that the American people are in control of who runs things in the U.S., but that is not how it works in the real world.
Our politicians are not stupid – they are going to be very good to the people that can give them the giant piles of money that they need for their campaigns. And the people that can do that are the ultra-wealthy and the giant corporations that the ultra-wealthy control.
Are you starting to get the picture?
There is a reason why the ultra-wealthy are referred to as “the establishment”. They have set up a system that greatly benefits them and that allows them to pull the strings.
“For more than a century, ideological extremists at either end of the political spectrum have seized upon well-publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure — one world, if you will. If that is the charge, I stand guilty, and I am proud of it.”
There is so much more that could be said about all of this. In fact, an entire library of books could be written about the power and the influence of the ultra-wealthy international bankers that run the world.
But hopefully this is enough to at least get some conversations started.
So what do you think about all of this? Please feel free to post a comment with your thoughts below…
You can thank the reckless money printing that the Federal Reserve has been doing for the incredible bull market that we have seen in recent months. When the Federal Reserve does more “quantitative easing”, it is the financial markets that benefit the most. The Dow and the S&P 500 have both hit levels not seen since 2007 this month, and many analysts are projecting that 2013 will be a banner year for stocks. But is a rising stock market really a sign that the overall economy is rapidly improving as many are suggesting? Of course not. Just because the Federal Reserve has inflated another false stock market bubble with a bunch of funny money does not mean that the U.S. economy is in great shape. In fact, the truth is that things just keep getting worse for average Americans. The percentage of working age Americans with a job has fallen from 60.6% to 58.6% while Barack Obama has been president, 40 percent of all American workers are making $20,000 a year or less, median household income has declined for four years in a row, and poverty in the United States is absolutely exploding. So quantitative easing has definitely not made things better for the middle class. But all of the money printing that the Fed has been doing has worked out wonderfully for Wall Street. Profits are soaring at Goldman Sachs and luxury estates in the Hamptons are selling briskly. Unfortunately, this is how things work in America these days. Our “leaders” seem far more concerned with the welfare of Wall Street than they do about the welfare of the American people. When things get rocky, their first priority always seems to be to do whatever it takes to pump up the financial markets.
When QE3 was announced, it was heralded as the grand solution to all of our economic problems. But the truth is that those running things knew exactly what it would do. Quantitative easing always pumps up the financial markets, and that overwhelmingly benefits those that are wealthy. In fact, a while back a CNBC article discussed a very interesting study from the Bank of England which showed a clear correlation between quantitative easing and rising stock prices…
It said that the Bank of England’s policies of quantitative easing – similar to the Fed’s – had benefited mainly the wealthy.
Specifically, it said that its QE program had boosted the value of stocks and bonds by 26 percent, or about $970 billion. It said that about 40 percent of those gains went to the richest 5 percent of British households.
Many said the BOE’s easing added to social anger and unrest. Dhaval Joshi, of BCA Research wrote that “QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it.”
So should we be surprised that stocks are now the highest that they have been in more than 5 years?
Of course not.
And who benefits from this?
The wealthy do. In fact, 82 percent of all individually held stocks are owned by the wealthiest 5 percent of all Americans.
Unfortunately, all of this reckless money printing has a very negative impact on all the rest of us. When the Fed floods the financial system with money, that causes inflation. That means that the cost of living has gone up even though your paycheck may not have.
If you go to the supermarket frequently, you know exactly what I am talking about. The new “sale prices” are what the old “regular prices” used to be. They keep shrinking many of the package sizes in order to try to hide the inflation, but I don’t think many people are fooled. Our food dollars are not stretching nearly as far as they used to, and we can blame the Federal Reserve for that.
Sadly, this is what the Federal Reserve does. The system was designed to create inflation. Before the Federal Reserve came into existence, the United States never had an ongoing problem with inflation. But since the Fed was created, the United States has endured constant inflation. In fact, we have come to accept it as “normal”. Just check out the amazing chart in the video posted below…
The chart in that video kind of reminds me of a chart that I shared in a previous article…
Not that I expect the United States to enter a period of hyperinflation in the near future.
Actually, despite all of the reckless money printing that the Fed has been doing, I expect that at some point we are going to see another wave of panic hit the financial markets like we saw back in 2008. The false stock market bubble will burst, major banks will fail and the financial system will implode. It could unfold something like this…
4 – Economic activity in the United States starts to grind to a halt.
5 – Unemployment rises above 20 percent and mortgage defaults soar to unprecedented levels.
6 – Tax revenues fall dramatically and austerity measures are implemented by the federal government, state governments and local governments.
7 – The rest of the globe rapidly loses confidence in the U.S. financial system and begins to dump U.S. debt and U.S. dollars.
I write about derivatives a lot, because they are one of the greatest threats that the global financial system is facing. In fact, right now a derivatives scandal is threatening to take down the oldest bank in the world…
Banca Monte dei Paschi di Siena, the world’s oldest bank, was making loans when Michelangelo and Leonardo da Vinci were young men and before Columbus sailed to the New World. The bank survived the Italian War, which saw Siena’s surrender to Spain in 1555, the Napoleonic campaign, the Second World War and assorted bouts of plague and poverty.
But MPS may not survive the twin threats of a gruesomely expensive takeover gone bad and a derivatives scandal that may result in legal action against the bank’s former executives. After five centuries of independence, MPS may have to be nationalized as its losses soar and its value sinks.
So when you hear the word “derivatives” in the news, pay close attention. The bankers have turned our financial system into a giant casino, and at some point the entire house of cards is going to come crashing down.
In response to the coming financial crisis, I believe that our “leaders” will eventually resort to money printing unlike anything we have ever seen before in a desperate attempt to resuscitate the system. When that happens, I believe that we will see the kind of rampant inflation that so many people have been warning about.
So what do you think about all of this?
Do you believe that Federal Reserve money printing is the real reason why the stock market is soaring?
Please feel free to post a comment with your thoughts below…
Barack Obama has greatly expanded the powers of the presidency during his time in the White House, but there is one institution that he simply will not mess with. There is one organization that is considered to be so sacred in Washington D.C. that Obama will not dare utter a single negative word against it. That organization is the Federal Reserve. Even though he has shown that he is unafraid to pick a fight with just about everyone else in Washington, Obama flat out refuses to criticize the Fed and he even reappointed Ben Bernanke for another term as Fed Chairman even though Bernanke has a track record of failure that would make the Chicago Cubs look good. Perhaps Obama is aware of what has happened to other presidents that have chosen to tangle with the Fed. In any event, it has become clear that Obama submits to anything that the Fed says without question, and the controversy over the “trillion dollar coin” is another perfect example of this. For weeks, there has been much speculation in the mainstream media about the possibility that the Obama administration may print up a one trillion dollar coin that it would use to keep paying the bills of the federal government if an agreement to raise the debt ceiling is not reached. But on Saturday the Federal Reserve killed that idea, and we shouldn’t be surprised by that because under no circumstances will the Fed ever accept a threat to their monopoly over money creation in the United States. If the Federal Reserve had allowed Obama to print up a debt-free trillion dollar coin, that would have set a very dangerous precedent for the Fed. The American people would have realized that the federal government can actually create debt-free money whenever it wants and that it does not actually have to borrow money from anyone. That is something that the Fed probably would have moved heaven and earth to keep from happening. But now we won’t ever know how far the Fed would really be willing to go to keep their monopoly over money creation, because Obama has no plans to challenge this latest ruling from “the real boss” of our financial system.
Sadly, most Americans don’t even realize that a private banking cartel has a monopoly over all money creation in this country. In recent years they have abused this power by wildly printing money (“quantitative easing“), and by making more than 16 trillion dollars in secret loans to their friends during the last financial crisis. Under our system, the private Federal Reserve creates money whenever they want, and nobody else gets to create money. It is an insane system, but very, very few of our politicians will ever dare to question it.
At this point, the U.S. Treasury Department is essentially just an arm of the Federal Reserve. That is why it was no surprise that the Fed and the Treasury Department issued a joint statement on Saturday. According to Treasury spokesman Anthony Coley, both the Treasury and the Fed have come to the conclusion that under no circumstances should a trillion dollar coin be printed up by the Obama administration…
“Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit”
But of course it was actually the Federal Reserve which made this decision. The following is from a report posted by Zeke Miller of Buzzfeed.com…
The Federal Reserve was responsible for killing a controversial proposal to circumvent the debt limit, a senior administration official told BuzzFeed Sunday.
On Saturday the Treasury Department released a statement ruling out the only remaining alternative to Congress raising the nation’s borrowing limit, which would utilize a loophole in federal law to mint a $1 trillion coin to be deposited in the Federal Reserve and ensure the federal government could pay all bills and debt obligations.
According to that Buzzfeed article, the Federal Reserve would have actually refused to recognize the trillion dollar coin if the Obama administration had tried to deposit it with the Fed…
But it was the Federal Reserve that killed the proposal, the official told BuzzFeed, denying a purely political rationale for the announcement, saying the independent central bank would not have credited the Treasury’s accounts for the vast sum for depositing the coin.
Wow.
So there you go.
The real boss has told Barack Obama how it is going to be, and Obama plans to meekly comply.
So why is the Federal Reserve so adamant about maintaining their monopoly over money creation?
Well, it is all about compound interest. Albert Einstein once made the following statement about compound interest…
“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
When the Federal Reserve system was initially created back in 1913, the bankers that created it intended for it to be a perpetual debt machine that would extract massive amounts of wealth from the U.S. government (and ultimately from all of us) through the mechanism of compound interest. Each year, hundreds of billions of dollars of interest are transferred into the pockets of the wealthy bankers and foreign nations that own our debt. This is one of the reasons why I preach about the evils of government debt until I am blue in the face. The debt-based Federal Reserve system is a way to systematically steal the wealth of the United States, and it is happening right in front of our eyes, but very few people actually understand it well enough to complain about it.
Unfortunately, we are rapidly getting to the point where we have accumulated so much debt that it is threatening to collapse our entire financial system. The following comes from a recent Zero Hedge article…
By now most are aware of the various metrics exposing the unsustainability of US debt (which at 103% of GDP, it is well above the Reinhart-Rogoff “viability” threshold of 80%; and where a return to just 5% in blended interest means total debt/GDP would double in under a decade all else equal simply thanks to the “magic” of compounding), although there is one that captures perhaps best of all the sad predicament the US self-funding state (where debt is used to fund nearly half of total US spending) finds itself in. It comes from Zhang Monan, researcher at the China Macroeconomic Research Platform: “The US government is now trying to repay old debt by borrowing more; in 2010, average annual debt creation (including debt refinance) moved above $4 trillion, or almost one-quarter of GDP, compared to the pre-crisis average of 8.7% of GDP.”
This is a key statistic most forget when they discuss the stock and flow of US debt: because whereas the total US deficit, and thus net debt issuance, is about $1 trillion per year, one has to factor that there is between $3 and $4 trillion in maturities each year, which have to be offset by a matched amount of gross issuance just to keep the stock of debt flat (pre deficit funding). The assumption is that demand for this gross issuance will always exist as old maturities are rolled into new debt, however, this assumption is contingent on one very key variable: interest rates not rising.
Do you understand what is being said there?
Not only is our debt rising by more than a trillion dollars a year, we also need to roll over trillions of dollars of federal debt each year. If interest rates on that debt start rising, we are going to start feeling the pain very rapidly.
As I have mentioned previously, the average rate of interest on U.S. government debt was 6.638 percent back in 2000. If we returned to that level today, we would be paying more than a trillion dollars a year just in interest on the national debt.
The main thing keeping interest rates low right now is the fact that the U.S. dollar is the de facto reserve currency of the world. If that ends, interest rates on U.S. debt will skyrocket. The following is from a recent article by Chris Ferreira…
The US Dollar is the reserve currency of the world. You need it to buy oil, a vital component of any economy. Since other countries like China cannot print US dollars at their leisure, they have to get it from somewhere. They get it from trade with the US. The US buys products in Asia and the rest of the world with US dollars, and in turn these same dollar surpluses are used to buy oil and US bonds, creating a much needed artificial demand for US dollars.
This is also how the enormous US 558$ billion trade deficit in 2011 was financed. The US has been in a trade deficit since the 1980′s and it continues the grow as jobs and manufacturing are being lost to more competitive nations. The trade deficit also accounts for the national debt. The financing of the debt creates artificial demand for US bonds which helps lower the interest rate and coincidentally helps to raise the debt levels even higher.
Unfortunately, the rest of the world is starting to move away from the U.S. dollar. Over the past couple of years, a whole host of international currency agreements have been signed that are intended to start reducing the use of the U.S. dollar in international trade. For much more on this, please see the following article: “The Giant Currency Superstorm That Is Coming To The Shores Of America When The Dollar Dies“.
Most Americans have absolutely no idea how very close we are to financial catastrophe. The only way we can continue to service our enormous 16 trillion dollar debt is for interest rates on that debt to remain super low. But the only way those interest rates can remain low is for the U.S. dollar to remain absolutely dominant in international trade. Once the rest of the world rejects the U.S. dollar, the game is over.
We are headed for total system meltdown, but neither major political party is going to do a thing about it. They are both just going to continue to meekly comply with the dictates of the real boss of our financial system – the Federal Reserve.
It is imperative that we educate the American people about these things. Please share this article with as many people as you can, and the following is another great article for anyone that does not understand how the Federal Reserve is destroying our financial system: “10 Things That Every American Should Know About The Federal Reserve“.
If Barack Obama can “solve” the debt ceiling crisis by printing up some trillion dollar coins, then why does the federal government need our money? As another debt ceiling showdown approaches, many in the liberal media are suggesting that if Congress does not raise the debt ceiling that Obama should just have the U.S. Treasury create a trillion dollar platinum coin and use it to pay our bills. It sounds crazy, but many notable voices (including Paul Krugman of the New York Times) are supporting this idea. But if the federal government has had the power to create trillion dollar coins out of thin air all this time, then why do we have to pay taxes? Not only that, why do we have a national debt? If the federal government can just create money whenever it wants, then why does the federal government ever have to borrow it from others? The U.S. Constitution actually grants Congress the power to “coin money”, so why is the Federal Reserve doing it? Those are some very important questions. Most Americans don’t even realize that the U.S. government never actually needed to borrow a single penny from anyone else. The U.S. Congress has the authority to create debt-free money whenever it wants to. Conceivably, the entire federal government could be funded without ever borrowing a single dollar and without ever receiving a single dollar from any of us in taxes. Just imagine that – a nation without a single penny of national debt, no income tax and no IRS. What a wonderful world that would be. Of course there would be other potential dangers under such a system (such as runaway inflation), and those dangers would have to be addressed. But the truth is that we don’t have to have an income tax or 16 trillion dollars of government debt. We only have those things because we have chosen to have those things.
Sometimes, a crisis can illuminate options that most people had not considered previously. As another debt ceiling crisis draws closer, many are looking for ways for the U.S. government to be able to continue to pay its bills if Congress does not authorize an increase in the debt ceiling.
If a debt ceiling agreement is not worked out, the U.S. government will soon only be able to pay about half the bills that are coming due after interest payments on the national debt (which will almost certainly be prioritized) are made.
That is why a lot of people on the left are pushing the “trillion dollar coin” alternative. So how would this work exactly? The mechanics were recently explained by Jim Pethokoukis on his American Enterprise Institute blog…
There are limits on how much paper money the U.S. can circulate and rules that govern coinage on gold, silver, and copper. BUT, the Treasury has broad discretion on coins made from platinum. The theory goes that the U.S. Mint would create a handful of trillion dollar (or more) platinum coins. The President would then order the coins deposited at the Fed, who would then put the coin(s) in the Treasury who now can pay all their bills and a default is removed from the equation. The effects on the currency market and inflation are unclear, to say the least.
In my opinion, if anyone in the federal government is going to be creating money out of thin air, it should be the U.S. Congress. After all, according to Article I, Section 8 of the U.S. Constitution, it is the U.S. Congress that has been granted the authority to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”.
But those that are pushing Obama to create a “trillion dollar coin” point to a law that Congress passed that allows the U.S. Treasury to mint platinum coins. The following is from a recent CNN article…
Normally, the Federal Reserve is charged with issuing currency. But U.S. law, specifically 31 USC § 5112, also grants Treasury permission to “mint and issue platinum bullion coins and proof platinum coins.”
This section of law was meant to allow for the printing of commemorative coins and the like. But the Treasury Secretary has the authority to mint these coins in any denomination he or she sees fit.
But it wouldn’t quite be that easy. According to a recent ABC News article, some elements of the coin design would have to be determined by legislation…
The more difficult part comes sometime after the decision is made to coin the platinum and before the Mint gets to work in sculpting the pieces.
At that point, the American people must decide whose face will adorn the trillion dollar trinket. The process to determine the “specs” of the coin, U.S. Mint Public Affairs Specialist Genevieve Billia warns, must be “determined by legislation,” creating the potential for another congressional impasse.
So we would likely end up back at square one.
But if printing up a “trillion dollar coin” does not work out, Paul Krugman of the New York Times has come up with another option…
Don’t like the platinum coin option? Here’s a functionally equivalent alternative: have the Treasury sell pieces of paper labeled “moral obligation coupons”, which declare the intention of the government to redeem these coupons at face value in one year.
It should be clearly stated on the coupons that the government has no, repeat no, legal obligation to pay anything at all; you see, they’re not debt, and therefore don’t count against the debt limit. But that shouldn’t keep them from having substantial market value.
Of course there is a very, very low probability that any of these wild ideas will ever be tried, but this debate has raised some very interesting points.
The truth is that we do not have to have a system where more money is only created when more debt is created. We could have a system where the federal government directly creates debt-free money that is spent directly into circulation by the federal government.
In fact, this has happened before.
As I have written about previously, during the presidency of JFK a limited number of debt-free United States Notes were issued by the U.S. Treasury and spent by the U.S. government directly into circulation without any new debt being created. In fact, each bill said “United States Note” right at the top.
Unfortunately, after JFK’s presidency no more debt-free United States Notes were ever issued.
But even before JFK, there were times when debt-free United States Notes were being used. According to Wikipedia, United States Notes were first used during the Civil War….
They were originally issued directly into circulation by the U.S. Treasury to pay expenses incurred by the Union during the American Civil War. Over the next century, the legislation governing these notes was modified many times and numerous versions have been issued by the Treasury.
So why are we using debt-based Federal Reserve Notes today instead of debt-free United States Notes?
If the Federal Reserve did not exist and the U.S. government directly created money instead of borrowing it, it is conceivable that we could have a national debt of $0.00 today instead of $16,432,707,263,449.56.
Which option do you think our children and our grandchildren will wish that we had opted for?
In a system where the government directly created money, it is also conceivable that we could completely do away with the income tax and the IRS completely. The U.S. once prospered greatly without an income tax, and it could do so again.
And the truth is that our system of taxation is broken beyond repair. If you doubt this, just read this article.
So what would the downside be to such a system? Well, of course rampant inflation would be a huge danger. Allowing Congress to print up money whenever they wanted to would be playing with fire. That is why it would be imperative for there to be a hard cap on what the federal government could spend. For example, you could set the cap on spending by the federal government at 20 percent of GDP. That way we would hopefully never end up looking like the Weimar Republic.
And the current federal debt could be paid down a little at a time using newly created debt-free currency. This would have to be done slowly to keep inflation under control, but it could be done.
Of course if you wanted to continue to fund the federal government through taxation, there are other options that would still allow you to do away with the income tax. For example, one of the ways that our founders intended for the federal government to be funded was through tariffs, and we could definitely raise a lot of money that way. Plus, that would have the added benefit of making American companies much more competitive again and it would reduce the flow of American jobs out of the country.
So am I in favor of having Barack Obama create a trillion dollar coin to get around the debt ceiling crisis?
Most definitely not. If it does not violate the letter of the Constitution (which I believe it does), it sure does violate the spirit of it.
But if the U.S. Congress decided to shut down the Federal Reserve and the IRS and they decided to abolish the income tax, and instead they started directly issuing debt-free currency directly into circulation, that is something I would very much be in favor of.
Yes, that system would not be perfect either, but it would be far more preferable to what we have today.
So what do you think? Should we keep our current system of debt-based money, or would a system of debt-free money be better?
Please feel free to post a comment with your opinion below…
Stuff costs too much. Seriously. Every time I go to the grocery store these days, I am absolutely horrified by the prices. I try not to buy anything that is not on sale, but the problem is that I am discovering that the new sale prices are the old regular prices. So now paying what used to be “full price” is supposedly a “good deal”. The other way that they are trying to hide rising prices is by shrinking package sizes. As if we wouldn’t notice that a box of 21 garbage bags is now being sold for the exact same price that a box of 25 garbage bags used to be sold for. It is one of my pet peeves. I feel like I am in the middle of some bizarre movie entitled “The Incredible Shrinking Dollar”. Sadly, I am far from alone. There are millions upon millions of American families that are seeing their expenses continue to rise even as their paychecks remain the same. But neither Barack Obama nor Mitt Romney seems very concerned about inflation. In fact, the Federal Reserve, QE3 and Ben Bernanke were not even mentioned in any of the three presidential debates. So I think that somebody should start the “Stuff Costs Too Much” Party. Inflation is a tax which is destroying the value of each dollar that we hold a little bit more every single day, and the American people deserve to know the truth about what is going on.
In this day and age, it simply does not pay to put money into long-term savings. When you finally pull your money out it will have far less purchasing power than it originally did.
Way back in 1950, you could buy a first-class stamp for just 3 cents and you could buy a gallon of gasoline for about 27 cents.
Wouldn’t it be great if you could still get a gallon of gasoline for 27 cents?
But we don’t have to go all the way back to 1950 to find low prices. All we have to do is go back ten years.
A recent article by Benny Johnson detailed how the prices of many of the things that we buy on a regular basis absolutely soared between 2002 and 2012. Just check out these price increases…
Eggs: 73%
Coffee: 90%
Peanut Butter: 40%
Milk: 26%
A Loaf Of White Bread: 39%
Spaghetti And Macaroni: 44%
Orange Juice: 46%
Red Delicious Apples: 43%
Beer: 25%
Wine: 60%
Electricity: 42%
Margarine: 143%
Tomatoes: 22%
Turkey: 56%
Ground Beef: 61%
Chocolate Chip Cookies: 39%
Gasoline: 158%
So what will the next ten years bring? Unfortunately, we are already being told that it looks like inflation is going to start accelerating. A recent CNBC article started this way…
Consumers will have to dig deeper into their pockets next year to pay for costlier health care, more expensive grocery bills and higher taxes, an extra drag on the country’s already slow-moving economy.
That is not what millions of struggling American families need to hear right about now.
Their bills just keep going up but their paychecks are not keeping pace.
Have you noticed that almost everything that we spend money on just keeps rising year after year?
According to USA Today, in some areas of the country water bills have actually tripled over the past 12 years.
Has your paycheck tripled?
Electricity bills in this country have risen faster than the overall rate of inflation for five years in a row.
Winter is a really bad time for power bills. Millions of struggling families will set their thermostats very low this winter and yet will still be slammed with absolutely outrageous bills.
Of course just about every type of insurance is going up faster than the overall rate of inflation.
Have you gotten a price increase notice in the mail lately?
I have.
The price of health insurance in particular has soared in recent years. Health insurance premiums increased faster than the overall rate of inflation in 2011 and that is happening once again in 2012.
All of these price increases are pushing many American families to the breaking point.
But Federal Reserve Chairman Ben Bernanke insists that there is very little inflation right now, and he has government statistics to back his assertions up.
Of course the way that the government calculates inflation has changed more than 20 times since 1978, but Bernanke never mentions that.
According to John Williams of shadowstats.com, if inflation was measured exactly the same way that it was back in 1990, the official inflation rate would be about 5 percent right now.
The American Institute for Economic Research says that inflation is even high than that right now. According to them, the real rate of inflation was about 8 percent last year.
Meanwhile, household incomes are actually going down all over America.
Even though we are supposedly in the midst of an “economic recovery”, median household income has declined for four years in a row.
Overall, median household income has declined by more than $4000 over the past four years.
Incomes are going down and prices just keep on rising.
So how are families adjusting?
Well, many of them are spending less. One survey found that 62 percent of all middle class Americans have had to reduce household spending over the past year.
Others are going into increasing amounts of debt in an attempt to survive from month to month.
Inflation has become a way of life in America. But what could make it a whole lot worse is if a nationwide crisis suddenly disrupted the normal operation of the economy. If that happened, we would see price gouging happen literally overnight. Just check out what one article that was posted on CNBC said happened in the aftermath of Hurricane Sandy…
Four dollars for a can of coke. Five hundred dollars a night for a hotel in downtown Brooklyn. A pair of D-batteries for $6.99.
These are just a few of the examples of price hikes I or friends of mine have personally come across in the run-up and aftermath of hurricane Sandy.
So you might want to use your extra dollars right now. They are never going to be more valuable than they are today, and in the event of a major disaster they might lose value very, very rapidly.
Unfortunately, millions of American families don’t have any extra money at all. Many of them have been slowly worn down by this economy and are now just desperately trying to survive. The following is what one reader shared in a comment following one of my recent articles…
There is one thing you should know about poverty: it is crushing! It crushes the spirit first and foremost, then it crushes the idea of dreams because people in extreme poverty don’t see a way out when they barely have enough to eat let alone get ahead in life. So, by offering a hand up to those in poverty, we relieve a bit of that pressure…just enough so that their basic needs are met. Once those needs are met, those in poverty can start to see “LIGHT”, something hard to see when being crushed by the pressures and hardships of poverty.
I know of what I speak; I was once living an upper middle-class life and enjoyed all the trappings of material and financial successes.
However, an accident caused that life as I knew it to end in a moment. I’m no longer able to work and for the past few years have barely been able to feed myself.
When I became homeless in 2010, I felt suicidal. My lowest moment was holding a sign asking for help very near the 6 bedroom home I once lived.
Don’t think that it can’t happen to you. What would you do if you suddenly lost your job and could not find another one? Would you be able to survive?
Just because you are living a middle class lifestyle today does not mean that you will be in the same position a year from now. The truth is that everything in your life can change in a single day. The following is from a comment that one of my readers named Kimberly left recently…
My husband lost his job of 20+ years to cut backs roughly 3 years ago, 8 months later his health declined of which I attribute to the depression he went through at not being able to find employment. I went back into the work force, or I should say tried… I’m a nursing assistant by trade but no nursing homes are hiring because the families are pulling their loved ones out because they cannot afford to keep them there, hospitals are not hiring because what jobs there are in my field go to nurses awaiting a nursing job and I’m sure my age (53) plays a role in it too. The closest hospital to us just announced it will be closing it’s doors on the 31 because despite it’s tries it cannot afford to remain open under Obamacare.
We have in the last couple years armed ourselves with a gun, started a garden and now do serious couponing to stock pile for emergencies which seem more and more each day are coming. We have dropped from a life lived on 65,000 – 75,000 a year to living on under 23,000 a year. We have made cut backs in every area of life and hope for the best.
We go to bed at night worried about tommorow, next week and next year .. you feel anxious all the time and panic attacks come more frequently with each passing day. I love the Lord with all my heart and I know He is in control, but am just human and one cannot stop the feelings that wash over them.
I have children and grandchildren and am scared to death what faces them in the coiming years. We all lived in within miles of each other until my children lost their jobs and could find nothing here in Mobile, Al. so they moved to Texas and have found at least some work… something is better than nothing you know. We are hundreds of miles apart now and rarely get to see them as gas is also so very high. I have a grand daughter I have never met because we cannot afford the trip and neither can they.
The U.S. economy has never even come close to recovering from the last economic downturn. If you doubt this, just read this article. Now the next economic crisis is rapidly approaching us.
If you think that the economic pain and suffering in this country are bad now, just wait.
What if there was a financial system that would eliminate the need for the federal government to go into debt, that would eliminate the need for the Federal Reserve, that would end the practice of fractional reserve banking and that would dethrone the big banks? Would you be in favor of such a system? A surprising new IMF research paper entitled “The Chicago Plan Revisited” by Jaromir Benes and Michael Kumhof is making waves in economic circles all over the globe. The paper suggests that the world would be much better off if we adopted a system where the banks did not create our money. So instead of a system where more money is only created when more debt is created, we would have a system of debt-free money that is created directly by national governments. There have been others that have suggested such a system before, but to have an IMF research paper actually recommend that such a system be adopted is a very big deal. At the moment, the world is experiencing the biggest debt crisis in human history, and this proposal is being described as a “radical solution” that could potentially remedy some of our largest financial problems. Unfortunately, apologists for the current system are already viciously attacking this new IMF paper, and of course the big banks would throw a major fit if such a system was ever to be seriously contemplated. That is why it is imperative that we educate people about how money really works. Our current system is in the process of collapsing and we desperately need to transition to a new one.
One of the fundamental problems with our current financial system is that it is based on debt. Just take a look at the United States. The way our system works today, the vast majority of all money is “created” either when we borrow money or the government borrows money. Therefore, the creation of more money creates more debt. Under such a system, it should not be surprising that the total amount of debt in the United States is more than 30 times larger than it was just 40 years ago.
We don’t have to do things this way. There is a better alternative. National governments can directly issue debt-free currency into circulation. The following is a brief excerpt from the IMF report…
At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher’s claims.
Why should banks be allowed to create money?
That is a very good question.
Why should sovereign governments ever have to borrow money from anyone?
That is another very good question.
Our current system is designed to enrich the bankers and get everyone else into debt.
One could slash private debt by 100pc of GDP, boost growth, stabilize prices, and dethrone bankers all at the same time. It could be done cleanly and painlessly, by legislative command, far more quickly than anybody imagined.
The conjuring trick is to replace our system of private bank-created money — roughly 97pc of the money supply — with state-created money. We return to the historical norm, before Charles II placed control of the money supply in private hands with the English Free Coinage Act of 1666.
Specifically, it means an assault on “fractional reserve banking”. If lenders are forced to put up 100pc reserve backing for deposits, they lose the exorbitant privilege of creating money out of thin air.
The nation regains sovereign control over the money supply. There are no more banks runs, and fewer boom-bust credit cycles.
So why don’t we go to such a system immediately?
Well, the transition to such a system would undoubtedly be a major shock to the global financial system, and most people try to avoid significant short-term pain even if there are tremendous long-term benefits.
More importantly, however, is that the bankers have a tremendous amount of power in our society today, and they would move heaven and earth to keep a debt-free monetary system from ever being implemented.
You see, the influence of the bankers is not just limited to the big banks. Our largest financial institutions (and the people who own them) also have large ownership stakes in the vast majority of the big Fortune 500 corporations. In essence, the big banks are at the very pinnacle of “the establishment” in the United States and in almost every other major country in the western world.
And the vast majority of all political campaigns are funded by “the establishment”. It takes an enormous amount of money to win campaigns these days, and most politicians are extremely hesitant to bite the hands of those that feed them.
So don’t expect any changes to happen overnight.
One proposal that has actually been put forward in Congress is to cancel all of the government debt that the Federal Reserve is currently holding. Right now, the Fed is holding more than 1.6 trillion dollars of U.S. government debt…
That would seem to make a lot of sense. That would immediately wipe more than 1.6 trillion dollars from the U.S. national debt without any real harm being done.
But “the establishment” would be horrified if such a thing happened, so I wouldn’t anticipate it happening any time soon.
Hopefully we can get the American people (along with people all over the globe) educated about these things so that we can start to get millions of people pushing for change.
A debt-free monetary system is superior to a debt-based monetary system in so many ways.
For example, if the U.S. government directly spent debt-free money into circulation, it could conceivably never need to borrow a single dollar ever again. If the government wanted to spend more money than it brought in, it would simply print it up and spend it.
Of course the big danger with that would be inflation. That is why it would be imperative for there to be a hard cap on what the government could spend. For example, you could set the cap on spending by the federal government at 20 percent of GDP. That way we would never end up looking like the Weimar Republic.
And the current federal debt could be paid down a little at a time using newly created debt-free dollars. This would have to be done slowly to keep inflation under control, but it could be done.
That way we would not hand a 16 trillion dollar debt to our children and our grandchildren. We created this mess so we should clean it up.
Theoretically you could also do away with the federal income tax if you wanted to. Personally, I would like to see the federal government be funded to a large degree by tariffs on foreign goods. That would also have the side benefit of bringing millions of jobs back into the United States.
Our system of income tax collection is just so incredibly inefficient. It costs us mind boggling amounts of time and money. Just consider the following stats from one of my previous articles…
1 – The U.S. tax code is now 3.8 million words long. If you took all of William Shakespeare’s works and collected them together, the entire collection would only be about 900,000 words long.
2 – According to the National Taxpayers Union, U.S. taxpayers spend more than 7.6 billion hours complying with federal tax requirements. Imagine what our society would look like if all that time was spent on more economically profitable activities.
3 – 75 years ago, the instructions for Form 1040 were two pages long. Today, they are 189 pages long.
4 – There have been 4,428 changes to the tax code over the last decade. It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.
5 – According to the National Taxpayers Union, the IRS currently has 1,999 different publications, forms, and instruction sheets that you can download from the IRS website.
6 – Our tax system has become so complicated that it is almost impossible to file your taxes correctly. For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household. All 46 of them came up with a different result.
7 – In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household. All five of them came up with a different result.
8 – The IRS spends $2.45 for every $100 that it collects in taxes.
For long stretches of our history the United States did not have any income tax, and during those times we thrived. It is entirely conceivable that we could return to such a system.
At this point, the wealthy have become absolute masters at hiding their wealth from taxation. According to the IMF, a total of 18 trillion dollars is currently being hidden in offshore banks. What we are doing right now produces very inequitable results and it is not working.
In many ways, inflation would be a much fairer “tax” than the income tax because inflation taxes each dollar equally. Nobody would be able to cheat the system.
But if people really love the IRS and the federal income tax, we could keep them under a debt-free money system. I just happen to think that the IRS and the federal income tax are both really bad ideas that have never served the interests of the American people.
In any event, hopefully you can see that there is a much broader range of solutions to our problems than the two major political parties have been presenting to us.
We do not have to allow the banks to create our money.
The federal government does not have to go into more debt.
We don’t actually need the Federal Reserve.
There are alternatives to the federal income tax and the IRS.
Yes, it is very true that no system would be perfect. But clearly the path that we are on is only going to lead to disaster. U.S. government finances are a complete and total nightmare, and this mountain of debt that we have accumulated is going to absolutely destroy us if we allow it to.
So somebody out there should be proposing a fundamental change in direction for our financial system.
Unfortunately, our politicians are just proposing more of the same, and we all know where that is going to lead.
The Federal Reserve continues to pump up this “bubble economy” by recklessly printing money and by setting interest rates artificially low, and the U.S. Congress continues to stand aside and allow them to systematically destroy our economy. The U.S. Congress could choose to end this madness at any time, but the truth is that Congress won’t even pass a law that would allow the American people to see what is going on over at the Federal Reserve. Congress has voted down every single bill that would authorize a comprehensive audit of the Federal Reserve. So the folks over at the Fed will continue to be able to destroy our future in secret. In fact, back in July Federal Reserve Chairman Ben Bernanke actually sent five thank you letters to members of Congress that gave speeches on the floor of the U.S. House of Representatives encouraging their fellow lawmakers to vote against the bill to audit the Fed. Since the U.S. Congress continues to refuse to do anything to hold the Federal Reserve accountable, the Fed will continue to print unprecedented amounts of money, it will continue to set interest rates insanely low and it will continue to pump up the greatest debt bubble in the history of the world. Unfortunately, all debt bubbles eventually burst, and when this one does it is going to be a financial nightmare unlike anything we have ever seen before.
It was Politico that first broke the story about the thank you letters that Federal Reserve Chairman Ben Bernanke sent to five members of Congress back in July. Bernanke acknowledged in the letters that there was never any worry that the “Audit the Fed” bill would actually get through Congress and be signed into law, but he was still extremely grateful that a number of members of Congress got up and publicly denounced the bill….
In July, the Fed chairman sent letters of gratitude to five Democratic members of Congress after they delivered speeches on the House floor urging fellow lawmakers to reject the “Audit the Fed” bill authored by retiring Texas Republican Ron Paul, the central bank’s chief antagonist.
Their efforts failed to defeat the bill, but they were not in vain, at least in Bernanke’s eyes.
“While the outcome of the vote was not in doubt, your willingness to stand up for the independence of the Federal Reserve is greatly appreciated,” Bernanke wrote in the letters, which were obtained by POLITICO through a Freedom of Information Act request.
So who did Bernanke send those letters to?
According to Politico, the thank you letters were delivered to U.S. Representatives Barney Frank, Elijah Cummings, Melvin Watt, Carolyn Maloney and Steny Hoyer.
By refusing to take action against the Federal Reserve, the U.S. Congress is silently endorsing their incredibly foolish policies.
Sadly, most Americans don’t even realize that the Federal Reserve has more control over our economy than anyone else does. Most Americans that are actually concerned about politics are busy arguing over whether Obama or Romney will be better for the economy when it is actually the Fed that controls the levers of economic power.
Just think about it.
The Federal Reserve played a major role in creating the housing bubble which severely damaged our financial system a few years ago.
As the chart below shows, after 9/11 the Federal Reserve dropped interest rates to historically low levels. This allowed potential home buyers to get into much larger mortgages, and the big banks (which the Fed supposedly “regulates”) started making home loans to almost anyone with a pulse.
When interest rates started to go back up to normal levels in 2005, many home owners discovered that their adjustable rate mortgages started to become much more painful. By 2007, we started to see a massive wave of mortgage defaults. In 2008, the financial system crashed.
In response to the financial crisis of 2008, the Federal Reserve dropped interest rates to record low levels. The effective federal funds rate is essentially at zero at this point, and the Fed has promised to keep interest rates at ultra-low levels all of the way into 2015.
But didn’t artificially low interest rates cause many of our problems in the first place? The central planners over at the Fed are convinced that this is the right course for our economy, but can we really live in a zero interest rate bubble indefinitely? Won’t this eventually cause even greater problems?….
The Fed is also destroying our economy by recklessly printing money.
Once upon a time, the U.S. monetary base rose at a very steady pace. But since the financial crisis of 2008, Ben Bernanke has been flooding the financial system with money and this has caused an unprecedented explosion in our money supply.
It isn’t too hard to see from this chart what the foolish “quantitative easing” policies of the Federal Reserve have done to our monetary base….
Fortunately a lot of the money from previous rounds of quantitative easing is being stashed by the big banks as “excess reserves” with the Federal Reserve, but when that money starts flowing into the “real economy” (and it will at some point), we are going to have a major problem on our hands.
But more than tripling our monetary base was not enough for Bernanke. He recently announced yet another round of quantitative easing which he says will last indefinitely.
Basically, Bernanke is taking a sledgehammer to the U.S. dollar. Our currency is being systematically destroyed, and the U.S. Congress is standing by and doing nothing.
For a lot more on why QE3 is going to be so incredibly destructive for our economy, please see the following five articles….
The Federal Reserve seems to think that printing more money is always the solution to whatever economic problems we are having.
But of course the Fed has been debasing our currency from the very beginning. The entire Federal Reserve system is designed to create inflation.
From the time that the Federal Reserve was created back in 1913, the purchasing power of a U.S. dollar has declined from $1.00 to only about 4 pennies today.
And now Bernanke seems bound and determined to wipe out those last 4 pennies.
The Federal Reserve system was also designed to create a never ending spiral of government debt.
Sadly, most Americans simply have no idea where money comes from. Most Americans have no idea that money that the Federal Reserve zaps into existence out of thin air is loaned to the U.S. government at interest. Most Americans have no idea that the primary reason why we are 16 trillion dollars in debt is because this is what the system was designed to do to us.
Today, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was originally created in 1913. This did not happen by accident….
Not that our politicians should be off the hook for this. They have been spending money as if there is no tomorrow. Most of them have shown no concern at all about the legacy of debt that they are passing on to future generations of Americans.
If our politicians had been more responsible, the national debt would still be there, but it would be at a much more manageable level.
If we ever want to totally get rid of our national debt, the Federal Reserve must be abolished.
There is no other way.
And government debt is not the only bubble that the Federal Reserve has pumped up.
The following is a chart that shows the growth of all forms of debt (government, business, consumer, etc.) in the United States. The total amount of debt in the United States has grown from less than $2 trillion to more than $55 trillion over the past 40 years….
How in the world could we have been so foolish?
How in the world did we allow the total amount of debt in our country to get more than 27 times larger over the past 40 years?
As you can see, there was a slight “hiccup” in the bubble as a result of the financial crisis of 2008, but now it has started growing again.
At this point our entire financial system is based on debt, and if the debt bubble does not continue to expand the entire thing will collapse.
But no financial bubble grows forever. History has proven that to us over and over.
At some point this bubble is going to burst.
When it does, we will either experience a deflationary collapse or a hyperinflationary collapse depending on how “the powers that be” respond to what is happening.
History has shown us that financial collapse is often accompanied by social upheaval. Many times it even leads to war.
So what will happen to America when our economic collapse happens?
Did printing vast quantities of money work for the Weimar Republic? Nope. And it won’t work for us either. If printing money was the secret to economic success, we could just print up a trillion dollars for every American and be done with it. The truth is that making everyone in America a trillionaire would not mean that we would all suddenly be wealthy. There would be the same amount of “real wealth” in our economy as before. But what it would do is render our currency meaningless and totally destroy faith in our financial system. Sadly, we have not learned the lessons that history has tried to teach us. Back in April 1919, it took 12 German marks to get 1 U.S. dollar. By December 1923, it took approximately 4 trillion German marks to get 1 U.S. dollar. So was the Weimar Republic better off after all of the “quantitative easing” that they did or worse off? Of course they were worse off. They destroyed their currency and wrecked all confidence in their financial system. There was an old joke that if you left a wheelbarrow full of money sitting around in the Weimar Republic that thieves would take the wheelbarrow and they would leave the money behind. Will things eventually get that bad in the United States someday?
Of course we are not going to see hyperinflation in the U.S. this week or this month.
But don’t think that it will never happen.
The people of Germany never thought that it would happen to them, but it did.
The following is an excerpt from a Wikipedia article about the Weimar Republic. Take note of the similarities between what the Weimar Republic experienced and what we are going through today….
The cause of the immense acceleration of prices that occurred during the German hyperinflation of 1922–23 seemed unclear and unpredictable to those who lived through it, but in retrospect was relatively simple. The Treaty of Versailles imposed a huge debt on Germany that could be paid only in gold or foreign currency. With its gold depleted, the German government attempted to buy foreign currency with German currency, but this caused the German Mark to fall rapidly in value, which greatly increased the number of Marks needed to buy more foreign currency. This caused German prices of goods to rise rapidly which increase the cost of operating the German government which could not be financed by raising taxes. The resulting budget deficit increased rapidly and was financed by the central bank creating more money. When the German people realized that their money was rapidly losing value, they tried to spend it quickly. This increase in monetary velocity caused still more rapid increase in prices which created a vicious cycle. This placed the government and banks between two unacceptable alternatives: if they stopped the inflation this would cause immediate bankruptcies, unemployment, strikes, hunger, violence, collapse of civil order, insurrection, and revolution. If they continued the inflation they would default on their foreign debt. The attempts to avoid both unemployment and insolvency ultimately failed when Germany had both.
When the Weimar Republic first started rapidly printing money everything seemed fine at first. Economic activity was buzzing and unemployment was very low.
But as the following chart shows, when hyperinflation kicks in, it can happen very quickly. By late 1922, the effects of all of the money printing were really starting to hit the German economy….
Once you start printing money it is really, really hard to stop.
By late 1922, inflation was officially out of control. An article in The Economist described what happened next….
Prices roared up. So did unemployment, modest as 1923 began. As October ended, 19% of metal-workers were officially out of work, and half of those left were on short time. Feeble attempts had been made to stabilise prices. Some German states had issued their own would-be stable currency: Baden’s was secured on the revenue of state forests, Hanover’s convertible into a given quantity of rye. The central authorities issued what became known as “gold loan” notes, payable in 1935. Then, on November 15th, came the Rentenmark, worth 1,000 billion paper marks, or just under 24 American cents, like the gold mark of 1914.
Hyperinflation hurts the poor, the elderly and those on fixed incomes the worst. The following is an excerpt from a work by Adam Fergusson….
The rentier classes who depended on savings or pensions, and anyone on a fixed income, were soon in penury, their possessions sold. Barter often took over from purchase. By law rents could not be raised, which allowed employers to pay low wages and impoverished landlords in a country where renting was the norm. The professional classes — lawyers, doctors, scientists, professors — found little demand for their services. In due course, the trade unions, no longer able to strike for higher wages (often uncertain what to ask for, so fast became the mark’s fall from day to day), went to the wall, too.
Workers regularly got wage increases during this time, but they never seemed to keep up with the horrible inflation that was raging all around them. So they steadily became poorer even though the amount of money they were bringing home was steadily increasing.
People started to lose all faith in the currency and in the financial system. This had an absolutely devastating effect on the German population. American author Pearl Buck was living in Germany at the time and the following is what she wrote about what she saw….
“The cities were still there, the houses not yet bombed and in ruins, but the victims were millions of people. They had lost their fortunes, their savings; they were dazed and inflation-shocked and did not understand how it had happened to them and who the foe was who had defeated them. Yet they had lost their self-assurance, their feeling that they themselves could be the masters of their own lives if only they worked hard enough; and lost, too, were the old values of morals, of ethics, of decency.”
Of course not everyone in Germany was opposed to the rampant inflation that was happening. There were some business people that became very wealthy during this time. The hyperinflation rendered their past debts meaningless, and by investing paper money (that would soon be worthless) into assets that would greatly appreciate thanks to inflation, many of them made out like bandits.
The key was to take your paper money and spend it on something that would hold value (or even increase in value) as rapidly as possible.
The introduction of the Rentenmark brought an end to hyperinflation, but the damage to the stability of the German economy had been done. The German economy went through several wild swings which ultimately resulted in the rise of the Nazis. The following description of this time period is from an article by Alex Kurtagic….
The post-hyperinflationary credit crunch was, not surprisingly followed by a credit boom: starved of money and basic necessities for so long (do not forget the hyperinflation had come directly after defeat in The Great War), many funded lavish lifestyles through borrowing during the second half of the 1920s. We know how that ended, of course: in The Great Depression, which eventually saw the end of the Weimar Republic and the beginning of the National Socialist era.
By the end of the decade unemployment really started to take hold in Germany as the following statistics reveal….
September 1928 – 650,000 unemployed
September 1929 – 1,320,000 unemployed
September 1930 – 3,000,000 unemployed
September 1931 – 4,350,000 unemployed
September 1932 – 5,102,000 unemployed
January 1933 – 6,100,000 unemployed
By the end of 1932, over 30 percent of all German workers were unemployed. This created an environment where people were hungry for “change”.
On January 30th, 1933 Hitler was sworn in as chancellor, and the rest is history.
So where will all of this money printing take America?
As I wrote about in a previous article, the amount of excess reserves that banks have stashed with the Federal Reserve has risen from about 9 billion dollars on September 10th, 2008 to about 1.5 trillion dollars today….
What is going to happen to inflation when all of those excess reserves start flowing out into the regular economy?
It won’t be pretty.
Just consider the ominous words that Philadelphia Fed President Charles Plosser used earlier this week….
“Inflation is going to occur when excess reserves of this huge balance sheet begin to flow outside into the real economy. I can’t tell you when that’s going to happen.”
“When that does begin if we don’t engage in a fairly aggressive and effective policy of preventing that from happening, there’s no question in my mind that that will lead to lots of inflation.”
Oh great.
And so what is Bernanke doing?
He is printing up lots more money.
But isn’t this supposed to help the economy?
I wouldn’t count on it.
According to USA Today, the following is what Plosser says about the effect that QE3 is likely to have on our economy….
“We are unlikely to see much benefit to growth or to employment from further asset purchases.”
But we will get more inflation, so our monthly budgets will not go as far as they did before.
The other day I was going to the supermarket, and my wife told me that she wanted some croissants. When I got to the bakery section I discovered that it was $4.49 for just four croissants.
If it had just been for me, I would have never gotten them. I am the kind of shopper that doesn’t even want to look at something unless there is a sale tag on it.
But I did get the croissants for my wife.
Unfortunately, thanks to Federal Reserve Chairman Ben Bernanke soon none of us may be able to afford to buy croissants.
I still remember the days when I could fill up my entire shopping cart for 20 bucks.
And it was not that long ago – I am talking about the late 90s.
But paying more for food is not the greatest danger we are facing. Bernanke is destroying the credibility of our currency and he is destroying faith in our financial system.
Bernanke may believe that he is preventing the next great collapse from happening, but the truth is that what he is doing is going to make the eventual collapse far worse.
QE3 has barely even started and some folks on Wall Street are already clamoring for QE4. In fact, as you will read below, one equity strategist at Morgan Stanley says that he would not be “surprised” if the Federal Reserve announced another new round of money printing by the end of the year. But this is what tends to happen when a financial system starts becoming addicted to easy money. There is always a deep hunger for another “hit” of “currency meth”. Federal Reserve Chairman Ben Bernanke was probably hoping that QE3 would satisfy the wolves on Wall Street for a while. His promise to recklessly print 40 billion dollars a month and use it to buy mortgage-backed securities is being called “QEInfinity” by detractors. During QE3, nearly half a trillion dollars a year will be added to the financial system until the Fed decides that it is time to stop. This is so crazy that even former Federal Reserve officials are speaking out against it. For example, former Federal Reserve chairman Paul Volcker says that QE3 is the “most extreme easing of monetary policy” that he could ever remember. But the big Wall Street banks are never going to be satisfied. If QE4 is announced, they will start calling for QE5. As I noted in a previous article, quantitative easing tends to pump up the prices of financial assets such as stocks and commodities, and that is very good for Wall Street bankers. So of course they want more quantitative easing. They always want bigger profits and bigger bonus checks at the end of the year.
But at this point the Federal Reserve has already “jumped the shark”. If you don’t know what “jumping the shark” means, you can find a definition on Wikipedia right here. Whatever shreds of credibility the Fed had left are being washed away by a flood of newly printed money.
Those running the Fed have essentially used up all of their bullets and the next great financial crisis has not even fully erupted yet.
So what is the Fed going to do if the stock market crashes and the credit market freezes up like we saw back in 2008?
How much more extreme can the Fed go?
One can just picture “Helicopter Ben” strapping on a pair of water skis and making the following promise….
“We are going to print so much money that we’ll make Zimbabwe and the Weimar Republic look like wimps!”
Sadly, the truth is that money printing is not a “quick fix” and it never has been. Just look at Japan. The Bank of Japan is on round 8 of their quantitative easing strategy, and yet things in Japan continue to get even worse.
But that is not going to stop the folks on Wall Street from calling for even more quantitative easing.
For example, the top U.S. equity strategist for Morgan Stanley, Adam Parker, made headlines all over the world this week by writing the following….
“QE3 will likely be insufficient to significantly boost equity markets and we wouldn’t be at all surprised to see the Fed dramatically augment this program (i.e., QE4) before year-end, particularly if economic and corporate news continue to deteriorate as they have over the past few weeks.”
Did you get what he is saying there?
He says that QE3 is not going to be enough to boost equity markets (the stock market) so more money printing will be necessary.
But wasn’t QE3 supposed to be about creating jobs and helping the middle class?
I can almost hear many of you laughing out loud already.
As I have written about before, QE3 is unlikely to change the employment picture in any significant way, but what it will do is create more inflation which will squeeze the poor, the middle class and the elderly.
The truth is that quantitative easing has always been about bailing out the banks, and the hope is that this will trickle down to the folks on Main Street as well, but that never seems to happen.
Wall Street is not calling for even more quantitative easing because it would be good for you and I. Rather, Wall Street is calling for even more quantitative easing because it would be good for them.
The Federal Reserve’s latest easing move has been nicknamed everything from “QE3″ to “QE Infinity” to “QEternal,” but some on Wall Street question whether the unprecedented move will be QEnough.
And of course everyone pretty much understands that QE3 is definitely not going to fix our economic problems. Even most of those on Wall Street will admit as much. In the CNBC article mentioned above, a couple of economists named Paul Ashworth and Paul Dales at Capital Economics were quoted as saying the following….
“The Fed can commit to deliver whatever economic outcome it likes, but the problem is that the crisis in the euro-zone and/or a stand-off in negotiations to avert the fiscal cliff in the U.S. may well reveal it to be like the proverbial Emperor with no clothes”
An emperor with no clothes?
I think the analogy fits.
The Federal Reserve is going to keep printing and printing and printing and things are not going to get any better.
The Federal Reserve’s QE3 bond buying program announced earlier this month could last until the middle of 2015 and eventually reach $2 trillion, according to an estimate from economists at Goldman Sachs.
The Goldman economists also wrote in a report that they believe the Fed will not raise the federal funds rate until 2016. This rate, which is used as a benchmark for a wide variety of consumer and business loans, has been near 0% since December 2008. The Fed said in its last statement that it expected rates would remain low until mid-2015.
So why is Wall Street whining and complaining so loudly right now?
Well, even with all of the bailouts and even with all of the help from the first two rounds of quantitative easing, things are still tough for them.
For example, Bank of America recently announced that they will be laying off 16,000 workers.
In addition, there are rumors that 100 highly paid partners at Goldman Sachs are going to be getting the axe. It is said that Goldman will save 2 billion dollars with such a move.
We haven’t even reached the next great financial crisis and the pink slips are already flying on Wall Street. Meredith Whitney says that she has never seen anything quite like this….
“The industry is as bad as I’ve seen it. So it’s certainly not a great time to be on Wall Street.”
But of course Wall Street is not going to get much sympathy from the rest of America. The truth is that things have been far rougher for most of the rest of us than things have been for them.
When the last crisis hit, they got trillions of dollars in bailout money and we got nothing.
So most people are not really in a mood to shed any tears for Wall Street.
But of course the Federal Reserve is definitely hoping to help their friends on Wall Street out by printing lots of money.
You never know, by the time this is all over we may see QE4, QE5, QE Reloaded, QE With A Vengeance and QE The Return Of The Bernanke.
Meanwhile, Europe is gearing up to print money like crazy too.
“Within our mandate, the European Central Bank is ready to do whatever it takes to preserve the euro, and believe me, it will be enough.”
And of course the Bank of Japan has joined the money printing party too. The following is from a recent article by David Kotok….
The recently announced additional program by the BOJ includes a fifty-percent allocation to the purchase of ten-year Japanese government bonds. The other fifty percent will buy shorter-term government securities. Thus, the BOJ is applying half of its additional QE stimulus to extracting long duration from the government bond market, denominated in Japanese yen.
All of the central banks seem to be getting on the QE bandwagon.
“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.”
Sadly, most Americans have a ton of faith in the people running our system, but the truth is that they really do not know what they are doing. Just check out what Dallas Fed President Richard Fisher said the other day….
“The truth, however, is that nobody on the committee, nor on our staffs at the Board of Governors and the 12 Banks, really knows what is holding back the economy. Nobody really knows what will work to get the economy back on course. And nobody – in fact, no central bank anywhere on the planet – has the experience of successfully navigating a return home from the place in which we now find ourselves. No central bank – not, at least, the Federal Reserve – has ever been on this cruise before.”
Can you imagine the head coach of a football team coming in at halftime and telling his players the following….
“Nobody on the coaching stuff really has any idea what will work.”
That sure would not inspire a lot of confidence, would it?
Perhaps the Fed should be open to some input from the rest of us.
Actually, back on September 14th the Federal Reserve Bank of San Francisco posted a poll on Facebook that asked the following question….
You can thank the reckless money printing that the Federal Reserve has been doing for the incredible bull market that we have seen in recent months. When the Federal Reserve does more “quantitative easing”, it is the financial markets that benefit the most. The Dow and the S&P 500 have both hit levels not seen since 2007 this month, and many analysts are projecting that 2013 will be a banner year for stocks. But is a rising stock market really a sign that the overall economy is rapidly improving as many are suggesting? Of course not. Just because the Federal Reserve has inflated another false stock market bubble with a bunch of funny money does not mean that the U.S. economy is in great shape. In fact, the truth is that things just keep getting worse for average Americans. The percentage of working age Americans with a job has fallen from 60.6% to 58.6% while Barack Obama has been president, 40 percent of all American workers are making $20,000 a year or less, median household income has declined for four years in a row, and poverty in the United States is absolutely exploding. So quantitative easing has definitely not made things better for the middle class. But all of the money printing that the Fed has been doing has worked out wonderfully for Wall Street. Profits are soaring at Goldman Sachs and luxury estates in the Hamptons are selling briskly. Unfortunately, this is how things work in America these days. Our “leaders” seem far more concerned with the welfare of Wall Street than they do about the welfare of the American people. When things get rocky, their first priority always seems to be to do whatever it takes to pump up the financial markets.
Who Runs The World? Solid Proof That A Core Group Of Wealthy Elitists Is Pulling The Strings
The ultra-wealthy don’t run down and put their money in the local bank like you and I do. Instead, they tend to stash their assets in places where they won’t be taxed such as the Cayman Islands. According to a report that was released last summer, the global elite have up to 32 TRILLION dollars stashed in offshore banks around the globe.
U.S. GDP for 2011 was about 15 trillion dollars, and the U.S. national debt is sitting at about 16 trillion dollars, so you could add them both together and you still wouldn’t hit 32 trillion dollars.
And of course that does not even count the money that is stashed in other locations that the study did not account for, and it does not count all of the wealth that the global elite have in hard assets such as real estate, precious metals, art, yachts, etc.
The global elite have really hoarded an incredible amount of wealth in these troubled times. The following is from an article on the Huffington Post website…
But as I mentioned previously, the global elite just don’t have a lot of money. They also basically own just about every major bank and every major corporation on the entire planet.
According to an outstanding NewScientist article, a study of more than 40,000 transnational corporations conducted by the Swiss Federal Institute of Technology in Zurich discovered that a very small core group of huge banks and giant predator corporations dominate the entire global economic system…
The researchers found that this core group consists of just 147 very tightly knit companies…
The following are the top 25 banks and corporations at the heart of this “super-entity”. You will recognize many of the names on the list…
1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
4. AXA
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
9. UBS AG
10. Merrill Lynch & Co Inc
11. Wellington Management Co LLP
12. Deutsche Bank AG
13. Franklin Resources Inc
14. Credit Suisse Group
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
17. Natixis
18. Goldman Sachs Group Inc
19. T Rowe Price Group Inc
20. Legg Mason Inc
21. Morgan Stanley
22. Mitsubishi UFJ Financial Group Inc
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation
The ultra-wealthy elite often hide behind layers and layers of ownership, but the truth is that thanks to interlocking corporate relationships, the elite basically control almost every Fortune 500 corporation.
The amount of power and control that this gives them is hard to describe.
Unfortunately, this same group of people have been running things for a very long time. For example, New York City Mayor John F. Hylan said the following during a speech all the way back in 1922…
These international bankers created the central banks of the world (including the Federal Reserve), and they use those central banks to get the governments of the world ensnared in endless cycles of debt from which there is no escape. Government debt is a way to “legitimately” take money from all of us, transfer it to the government, and then transfer it into the pockets of the ultra-wealthy.
Today, Barack Obama and almost all members of Congress absolutely refuse to criticize the Fed, but in the past there have been some brave members of Congress that have been willing to take a stand. For example, the following quote is from a speech that Congressman Louis T. McFadden delivered to the U.S. House of Representatives on June 10, 1932…
Sadly, most Americans still believe that the Federal Reserve is a “federal agency”, but that is simply not correct. The following comes from factcheck.org…
According to researchers that have looked into the ownership of the big Wall Street banks that dominate the Fed, the same names keep coming up over and over: the Rockefellers, the Rothschilds, the Warburgs, the Lazards, the Schiffs and the royal families of Europe.
But ultra-wealthy international bankers have not just done this kind of thing in the United States. Their goal was to create a global financial system that they would dominate and control. Just check out what Georgetown University history professor Carroll Quigley once wrote…
Sadly, most Americans have never even heard of the Bank for International Settlements, but it is at the very heart of the global financial system. The following is from Wikipedia…
The ultra-wealthy have also played a major role in establishing other important international institutions such as the United Nations, the IMF, the World Bank and the WTO. In fact, the land for the United Nations headquarters in New York City was purchased and donated by John D. Rockefeller.
The international bankers are “internationalists” and they are very proud of that fact.
The elite also dominate the education system in the United States. Over the years, the Rockefeller Foundation and other elitist organizations have poured massive amounts of money into Ivy League schools. Today, Ivy League schools are considered to be the standard against which all other colleges and universities in America are measured, and the last four U.S. presidents were educated at Ivy League schools.
The elite also exert a tremendous amount of influence through various secret societies (Skull and Bones, the Freemasons, etc.), through some very powerful think tanks and social clubs (the Council on Foreign Relations, the Trilateral Commission, the Bilderberg Group, the Bohemian Grove, Chatham House, etc.), and through a vast network of charities and non-governmental organizations (the Rockefeller Foundation, the Ford Foundation, the World Wildlife Fund, etc.).
But for a moment, I want to focus on the power the elite have over the media. In a previous article, I detailed how just six monolithic corporate giants control most of what we watch, hear and read every single day. These giant corporations own television networks, cable channels, movie studios, newspapers, magazines, publishing houses, music labels and even many of our favorite websites.
Considering the fact that the average American watches 153 hours of television a month, the influence of these six giant corporations should not be underestimated. The following are just some of the media companies that these corporate giants own…
Time Warner
Home Box Office (HBO)
Time Inc.
Turner Broadcasting System, Inc.
Warner Bros. Entertainment Inc.
CW Network (partial ownership)
TMZ
New Line Cinema
Time Warner Cable
Cinemax
Cartoon Network
TBS
TNT
America Online
MapQuest
Moviefone
Castle Rock
Sports Illustrated
Fortune
Marie Claire
People Magazine
Walt Disney
ABC Television Network
Disney Publishing
ESPN Inc.
Disney Channel
SOAPnet
A&E
Lifetime
Buena Vista Home Entertainment
Buena Vista Theatrical Productions
Buena Vista Records
Disney Records
Hollywood Records
Miramax Films
Touchstone Pictures
Walt Disney Pictures
Pixar Animation Studios
Buena Vista Games
Hyperion Books
Viacom
Paramount Pictures
Paramount Home Entertainment
Black Entertainment Television (BET)
Comedy Central
Country Music Television (CMT)
Logo
MTV
MTV Canada
MTV2
Nick Magazine
Nick at Nite
Nick Jr.
Nickelodeon
Noggin
Spike TV
The Movie Channel
TV Land
VH1
News Corporation
Dow Jones & Company, Inc.
Fox Television Stations
The New York Post
Fox Searchlight Pictures
Beliefnet
Fox Business Network
Fox Kids Europe
Fox News Channel
Fox Sports Net
Fox Television Network
FX
My Network TV
MySpace
News Limited News
Phoenix InfoNews Channel
Phoenix Movies Channel
Sky PerfecTV
Speed Channel
STAR TV India
STAR TV Taiwan
STAR World
Times Higher Education Supplement Magazine
Times Literary Supplement Magazine
Times of London
20th Century Fox Home Entertainment
20th Century Fox International
20th Century Fox Studios
20th Century Fox Television
BSkyB
DIRECTV
The Wall Street Journal
Fox Broadcasting Company
Fox Interactive Media
FOXTEL
HarperCollins Publishers
The National Geographic Channel
National Rugby League
News Interactive
News Outdoor
Radio Veronica
ReganBooks
Sky Italia
Sky Radio Denmark
Sky Radio Germany
Sky Radio Netherlands
STAR
Zondervan
CBS Corporation
CBS News
CBS Sports
CBS Television Network
CNET
Showtime
TV.com
CBS Radio Inc. (130 stations)
CBS Consumer Products
CBS Outdoor
CW Network (50% ownership)
Infinity Broadcasting
Simon & Schuster (Pocket Books, Scribner)
Westwood One Radio Network
NBC Universal
Bravo
CNBC
NBC News
MSNBC
NBC Sports
NBC Television Network
Oxygen
SciFi Magazine
Syfy (Sci Fi Channel)
Telemundo
USA Network
Weather Channel
Focus Features
NBC Universal Television Distribution
NBC Universal Television Studio
Paxson Communications (partial ownership)
Trio
Universal Parks & Resorts
Universal Pictures
Universal Studio Home Video
And of course the elite own most of our politicians as well. The following is a quote from journalist Lewis Lapham…
Have you ever wondered why things never seem to change in Washington D.C. no matter who we vote for?
Well, it is because both parties are owned by the establishment.
It would be nice to think that the American people are in control of who runs things in the U.S., but that is not how it works in the real world.
In the real world, the politician that raises more money wins more than 80 percent of the time in national races.
Our politicians are not stupid – they are going to be very good to the people that can give them the giant piles of money that they need for their campaigns. And the people that can do that are the ultra-wealthy and the giant corporations that the ultra-wealthy control.
Are you starting to get the picture?
There is a reason why the ultra-wealthy are referred to as “the establishment”. They have set up a system that greatly benefits them and that allows them to pull the strings.
So who runs the world?
They do. In fact, they even admit as much.
David Rockefeller wrote the following in his 2003 book entitled “Memoirs”…
There is so much more that could be said about all of this. In fact, an entire library of books could be written about the power and the influence of the ultra-wealthy international bankers that run the world.
But hopefully this is enough to at least get some conversations started.
So what do you think about all of this? Please feel free to post a comment with your thoughts below…