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The Federal Reserve Seems Quite Serious About Tapering – So What Comes Next?

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DollarsWill this be the year when the Fed’s quantitative easing program finally ends?  For a long time, many analysts were proclaiming that the Fed would never taper.  But then it started happening.  Then a lot of them started talking about how “the untaper” was right around the corner.  That hasn’t happened either.  It looks like that under Janet Yellen the Fed is quite determined to bring the quantitative easing program to a close by the end of this year.  Up until now, the financial markets have been slow to react because there has been a belief that the Fed would reverse course on tapering the moment that the U.S. economy started to slow down again.  But even though the U.S. middle class is in horrible shape, and even though there are lots of signs that we are heading into another recession, the Fed has continued tapering.

Of course it is important to note that the Fed is still absolutely flooding the financial system with money even after the announcement of more tapering on Wednesday.  When you are talking about $55,000,000,000 a month, you are talking about a massive amount of money.  So the Fed is not exactly being hawkish.

But when Yellen told the press that quantitative easing could end completely this fall and that the Fed could actually start raising interest rates about six months after that, it really spooked the markets.

The Dow was down 114 points on Wednesday, and the yield on 10 year U.S. Treasuries shot up to 2.77%.  The following is how CNBC described the reaction of the markets on Wednesday…

Despite a seemingly dovish tone, markets recoiled at remarks from Yellen, who said interest rate increases likely would start six months after the monthly bond-buying program ends. If the program winds down in the fall, that would put a rate hike in the spring of 2015, earlier than market expectations for the second half of the year.

Stocks tumbled as Yellen spoke at her initial post-meeting news conference, with the Dow industrials at one point sliding more than 200 points before shaving those losses nearly in half. Short-term interest rates rose appreciably, with the five-year note moving up 0.135 percentage points. The seven-year note tumbled more than one point in price.

But this is just the beginning.  When it finally starts sinking in, and investors finally start realizing that the Fed is 100% serious about ending the flow of easy money, that is when things will start getting really interesting.

Can the financial markets stand on their own without massive Fed intervention?

We shall see.  Even now there are lots of signs that a market crash could be coming up in the not too distant future.  For much more on this, please see my previous article entitled “Is ‘Dr. Copper’ Foreshadowing A Stock Market Crash Just Like It Did In 2008?

And what is going to happen to the market for U.S. Treasuries once the Fed stops gobbling them up?

Where is the demand going to come from?

In recent months, foreign demand for U.S. debt has really started to dry up.  Considering recent developments in Ukraine, it is quite certain that Russia will not be accumulating any more U.S. debt, and China has announced that it is “no longer in China’s favor to accumulate foreign-exchange reserves” and China actually dumped about 50 billion dollars of U.S. debt during the month of December alone.

Collectively, Russia and China account for about a quarter of all foreign-owned U.S. debt.  If you take them out of the equation, foreign demand for U.S. debt is not nearly as strong.

Will domestic sources be enough to pick up the slack?  Or will we see rates really start to rise once the Fed steps to the sidelines?

And of course rates on U.S. government debt should actually be much higher than they are right now.  It simply does not make sense to loan the U.S. government massive amounts of money at interest rates that are far below the real rate of inflation.

If free market forces are allowed to prevail, it is inevitable that interest rates on U.S. debt will go up substantially, and that will mean higher interest rates on mortgages, cars, and just about everything else.

Of course the central planners at the Federal Reserve could choose to reverse course at any time and start pumping again.  This is the kind of thing that can happen when you don’t have a true free market system.

The truth is that the Federal Reserve is at the very heart of the economic and financial problems of this country.  When the Fed intervenes and purposely distorts the operation of free markets, the Fed creates economic and financial bubbles which inevitably burst later on.  We saw this happen during the great financial crisis of 2008, and now it is happening again.

This is what happens when you allow an unelected, unaccountable group of central planners to have far more power over our economy than anyone else in our society does.

Most people don’t realize this, but the greatest period of economic growth in all of U.S. history was when there was no central bank.

We don’t need a Federal Reserve.  In fact, the performance of the Federal Reserve has been absolutely disastrous.

Since the Fed was created just over 100 years ago, the U.S. dollar has lost more than 96 percent of its value, and the size of the U.S. national debt has gotten more than 5000 times larger.  The Fed is at the very center of a debt-based financial system that has trapped us, our children and our grandchildren in an endless spiral of debt slavery.

And now we are on the verge of the greatest financial crisis that the United States has ever seen.  The economic and financial storm that is about to unfold is ultimately going to be even worse than the Great Depression of the 1930s.

Things did not have to turn out this way.

Congress could have shut down the Federal Reserve long ago.

But our “leaders” never seriously considered doing such a thing, and the mainstream media kept telling all of us how much we desperately needed central planners to run our financial system.

Well, now those central planners have brought us to the brink of utter ruin, and yet only a small minority of Americans are calling for change.

Soon, we will all get to pay a great price for this foolishness.  A great financial storm is fast approaching, and it is going to be exceedingly painful.

  • Rodster

    One other possibilty could be that the Fed realizes that we are at the point of NO return and when the economy collapses they don’t want to be blamed for it because they never stopped printing monopoly money.

  • ThatGuy799

    I honestly think they have to, if they don’t things are going to get crazy real fast.

    • Rodster

      Things are going to get crazy either way. All that monopoly money will eventually wind up on our shores and possibly into the consumer system and that’s what the Fed did not want to happen and why they essentially paid the big banks to not lend money. If those trillions of cheap money gets into consumers hands you could easily cause hyperinflation.

      And if that’s not enough to worry about, theres always WAR. Be that as it may this is ALL plying into the HANDS of the Globalists like the IMF, World Bank and BIS who wants the world to switch over to a Global SDR for ultimate power and control over every Nation on the planet.

      • Richard Fishel

        Bottom Line: The Death of the Dollar. When that happens the Nation; the Constitutional Republic our forefathers gave us is DEAD. Everything Changes then and NOT for the Better but for the WORSE, Much Worse. Only ALMIGHTY GOD knows what it will look like in America THEN.

        • Rodster

          You don’t need God to tell you how this all ends becuase the IMF along with the World Bank are waiting for that moment to arrive. They will be the Slumlords of this world. That has been their end game for several decades now.

  • The FED can reverse their tapering at any time Michael because the money they print is less valuable than toilet paper so it does not matter. You are “spot on” however, the dollar is near dead and Russia and China are no longer taking on any more of our debt and so that changes our nations dynamics quite drastically. Look for a 40%-60% Market Correction in 2014 or 2015 but probably fairly soon. Also look for a soon coming Global Currency Reset

    • rock

      May I have all that money you think is less valuable than toilet paper which you own? I tell you what, I’ll give you one sheet of Charmin, for every $1.00 bill you give me, Scott…

      • Raymond Chow

        I guess you didn’t understand his point. The fact is we are still being forced by the gov’t to use the dollar for exchange, so, he’ll use the dollar to buy rolls of toilet paper to save for future use. When the sheeples of the world wakes up and and realized they are being paid with paper in exchange for their sweat and hard work, then, you’ll realized that the toilet paper is more valuable than the dollar. At least the toilet paper is much more comfortable to use in your butt than the dollar.

    • WK

      Point being of course that the money supply extension is out of thin air. I do not buy any talk of a major market correction or we would have sustained it long ago. The economy is no different fundamentally today than it was in 2009-2010, corporations are not hiring and its BS the depiction of solidly improving metrics in the economy. Tens of millions have left the work force, and GDP growth is due to borrowed money.

      As long as earnings are directed away from American labor and towards investors, the longer this continues. Corporations are responsible for all of this, with their changed policy of undercutting the American middle class with their conscious cost cutting by shifting production overseas. I can not foresee a scenario where corporations ‘see the light’ and return the middle class to America by paying a decent wage to American workers. They have gotten use to the sugar high of screwing American workers, and by extension, gutting the growth potential of the US economy accordingly. There are no resources to grow the American economy in the global economy structure. Labor costs are down and will continue to go down, since cheaper labor can always be sought overseas, or with imported labor.

      I have no sympathy for companies like GM that have outsourced much of their production, mooch off the American taxpayer to survive, and then still deliver questionable product subject to recall. I have not driven a GM product in 25 years now and that is not going to change.

      • wk

        This wk is me either lol

        • wk

          ^* not me I meant

  • K

    My theory is they were printing so much so fast Even people who do not pay attention to much, were starting to notice. So make some small moves, to at least put that group, back to sleep. Also by applying the brakes a little, maybe they can stretch it past the mid-term elections.

    • k

      Elections yeah…another reason, the fed could be doing this.

  • DJohn1

    There was a man who grabbed a tiger by the tail and started swinging the tiger by said tail at a good speed. The tiger could not reach around and grab the man because he spun the tiger so fast. The tiger is very angry.
    As time went on the man started to get tired. He wasn’t able to keep spinning the tiger by its tail much longer. Yet once he stopped the tiger’s claws would reach back and kill him.
    So he started walking as he spun the tiger. Eventually he came to a big canyon. When he let go the canyon ate the tiger as it fell thousands of feet down the canyon wall.
    Our economy is that tiger. Once they turn loose of the tiger it will reach back and claw them dead.
    No one has found a canyon to throw the tiger in. No one has come up with a good solution to this economic nightmare.
    The canyon might be to declare bankruptcy. But then everyone on the planet will be holding dollars that are worthless. That is anger and the claws that reach around to kill.
    Part of that tiger is the no-interest that the feds have enforced. It is a cheat. Because any one that saves money is rewarded by the money being worth much less than when they saved it. The interest on the money does not begin to keep the money worth anything. Even if they placed interest at 10 per cent, in 10 years the money would not be able to keep up with inflation.
    The FED has that tiger and they are spinning it as fast as they can to no avail.

    • CharlesH

      Did you make that story up?

      • DJohn1

        The tiger by the tail is an old legend from India. Applying to the American economic situation was my idea.

        • Nicknakthetruthspeaker

          Who want try with a real tiger?

        • Jean Bush

          You did good, John.

        • GSOB

          The ‘Man’ = The ‘Federal reserve system’

          or do you have someone more specific?

      • Rusty Brown

        That’s where the expression “have a tiger by the tail” comes from. You can’t hold on and you dare not let go. Old story.

    • Eric Quintero

      Awesome analogy. I like that story.

    • Papa Charlie

      Well spoken. And as you say, there is no solution that will not hurt.

    • Observer

      Your hammer just missed the nail by a small amount. There IS a canyon that will absorb the economy. You see, in the original tiger story, the man was able to save himself, while the tiger met with a grizzly death. This is precisely what will happen to the economy, in the from of global depopulation, achieved through many different avenues.

    • MichaelfromTheEconomicCollapse

      Very nice comment – and 47 up votes so far. 🙂


      • Jean Bush

        Hello Michael, aka Saddletramp?

    • Grieve

      Sadly, there is a canyon. It’s reduction in population. Solves all of the resource allocation problems, mitigates the rush to climate change, does away with the proletarian infatuation with democracy, and leaves the rich and their security forces on top, with the grateful few in the remaining serf class. No tiger claw wounds, because no tiger left.

      If I were rich I would think in these terms, I can’t believe the rich aren’t.

  • Sackman

    Come on. Was hoping to be able to refinance my mortgage.

  • CharlesH

    Think of the economy running on ‘free’ money – kind of like a drug addict on heroin. Now…take the heroin away from the addict, what happens to him/her? He goes through withdrawals, same thing in happening and will continue to happen in the economy. It’s not a pretty sight nor should it be.

    • Yasha7

      (CharlesH, may I just say that I love your avatar?)

      • CharlesH

        Thanks, I thought it appropriate since life has made me somewhat of a cynic – so “when pigs fly” pretty well sums it up. 🙂

  • davidmpark

    Coupled with an impending international war with the new USSR, attacks on our utilities and infrastructure, the coming food shortages, and the current push for the ruination of this nation through any and all methods…

    At least there’s a Heavenly Father and our Redeemer who are willing to step in to sustain and guide the faithful. All is not lost. The worst of trials leads to the sweetest of blessings.

    • voice in the wilderness

      Jesus foretold there would be a tribulation right before his coming in Kingdom power, a tribulation like no other that has befallen mankind, in fact if God didn’t cut it short, no flesh would be saved.It seems that we are very near to that event and need to remember that God is orchestrating the collapse of human self governance proving once and for all that man cannot decide for himself or others what is good and bad.
      Then God’s Kingdom in the hands of a truly good ruler (Jesus) will usher in an era of peace and prosperity for those who look to Him and trust Him. Now ,more than ever, we need to do that.

      • davidmpark

        There’s a lot we can talk about on this, and I’d like to. What denomination are you with, or are you more independent?

    • Gay Veteran

      new USSR???????

  • Bubba Johnson


  • hyperinflation has landed

    inflation as far as the fed eye can see. jy gonna crank up rates to head it off at the pass, unfortunately that 10 trill has burst the
    levy ,america is now zimbabwe

  • LiveFree

    Like Gerald Celente says when all else fails they take you to war.

  • Bill

    Is this great news the reason the $ index shot over 80 today?

  • rat28

    Nothing to worry here.. Janet Yellen has learned well.. Economy is getting hot so it is alright to tighten now.. Managing economy is as easy as turning the tap on and off!

  • Paul

    I don’t think the Fed is 100% serious about ending QE. As the economy gets worse they will pull out all the stops trying to keep the Ponzi Scheme going.


      It’s all Kubuki. The print continues.

      • dooder

        Xsandiegoca, I suspect the same. They just call it something else and funal it in through another way.

  • Denise

    Last count, there have been 11 suicides of bankers in the last couple of months. That happened before in 1929. The New World Order is in place and Obama is on the verge of pushing America over the financial cliff.
    A NWO is impossible to bring about with a strong America.

  • Jen

    …it all will lead to a One-World-Currency with a One-World-Government and eventually to the ‘Mark of the Beast’…all these things must happen… It’s ALL prophesied in the Bible… ‘And I saw heaven opened, and behold a white horse; and he that sat upon him was called Faithful and True, and in righteousness he doth judge and make war. His eyes were as a flame of fire, and on his head were many crowns; and he had a name written, that no man knew, but he himself. And he was clothed with a vesture dipped in blood: and his name is called The Word of God. And the armies which were in heaven followed him upon white horses, clothed in fine linen, white and clean. And out of his mouth goeth a sharp sword, that with it he should smite the nations: and he shall rule them with a rod of iron: and he treadeth the winepress of the fierceness and wrath of Almighty God. And he hath on his vesture and on his thigh a name written, King Of Kings, And Lord Of Lords. REPENT AND TURN TO JESUS BEFORE IT IS TO LATE.

    • Guest


  • Hammerstrike

    Just talk, to BS the gullible into “investing” more down the drain.

    They won´t, crash happen in any case so better delay it as much as possible so to be better prepared for it.


    What happens when interest rates double to their “normal” levels and we have to pony up another trillion of vigorish a year? We will be like that guy that bought a 500K house with a 1% teaser ARM that rose to 7% in very short order.

    • Mike Smithy

      Just print more fiat. Rinse and repeat.

  • jakartaman

    I believe there will not be one thing that will bring us/economy down but a confluence of a few things. First there will need to be a trigger (the straw) This in my opinion will be when Israel attacks the Iranian nuke sites and the whole of the middle east stops their internal fighting and turn to fight Israel or Russia tries to go beyond Crimea. Japan’s economy may be the first to go under – followed by the Euro then the world.
    Or simply the world takes away our printing press.

    • James

      Jakartaman, are you an Indonesian? I am an Indonesian too! I am so glad to find a fellow Indonesian here!

  • TooLittleTooLate

    I think our eyes should be watching what is going on with Russia and China right now. Tapering has it’s consequences, that’s true enough but, the damage on the world’s stage that is being done by this inept administration can not be overstated. Tapering won’t matter on whit when the world decides not to trade in dollars anymore…. Then all that carry trade cash will come rolling in like a tsunami…. all foreign debt positions will be liquidated and all that inflation that we exported will coming home to roost.

    What happens with Russia on the world’s stage is making a very large impact on world opinion of the U.S. Depending on which country you’re in, we either look completely inept or we look like a bully. Either way, the damage is massive to our reputation.

    Even if we did want to punish Russia, we are so weak economically that if China would start selling it’s treasury holdings, that would sink our entire economy ( and, for now the world’s economy )….. But, if they set up their new trading agreements in other currencies, this may seem like a viable solution to our arrogant bumbling intervening govt. to them.

    We are so weak, Russia could hurt us by knocking out a few power stations covertly on their own without anyone’s help…. sponsor and help a few terrorist do it for them even.

    There are so many weak spots in our economy, it’s hard to predict the outcome so, my eyes are watching the current crisis…. it alone could trigger a set of events that would start the avalanche.

  • Mike Smithy

    The Stawk Market appears to be throwing a Taper Tantrum this morning since the opening bell. HaHaHaHa. Burn baby burn.

  • Trailer Park Investor

    I think a better term for what is about to happen is:
    Economic Apocalypse
    Much like the KT Boundary where everything before and everything after are like Night and Day difference.
    The AFTER will have people surviving like the 1800’s with very little technology. You WILL work – OR – YOU DON”T EAT. A cold hard fact but it will become very much true. The days of eating off Uncle Sam or the backs of taxpayers OR good Samaritans or even family are a distant memory. And for those who refuse to work they will not eat and they will perish. Those who have prepared will have it better and those who have gold and silver will have a means of trade where the rest of us have only our hands or the fruit of our labor to trade for goods.
    So Prepare!

    • wk

      You can’t eat gold and silver

      • Mike Smithy

        A good prepper will diversify his stash. Food, water, shelter, guns, ammo, medicine, whiskey, tools and yes: gold and silver to supplement your ability to barter when SHTF.

  • esqualido

    When the market tanked at the faintest suggestion of tapering by Yellen yesterday, Steve Liesman, the CNBC Keynestone Kop on the beat, was very quick to reassure listeners that she was still very much the dove ( as in “if we can give money nearly interest-free to the very banks which own us, why shouldn’t we do it as long as we can get away with it?”(and that is reason enough to End The Fed)

  • Horhey

    The problem with this article is it puts all the responsibility on the fed. I believe even if the fed didn’t exist, the problem would be here anyway. The people behind the curtain also run the treasury. They would have made a way “legal” to do the same thing in a nutshell. The agenda is greed, and greed prevails today. Affordable health care reflects that in a great way. The people can’t stop things when the higher ups push it on us. No matter what entity runs the economy or currency, in the end it will be controlled by a central agency known as the UN. No matter how the little people cry out, you better be prepared for the New World Order. But hey, at least you will have a card “to buy and to sell”(it’ll probably have a cool picture of a fierce animal denoting power like a…7 headed mutant creature), the end scenario is soon to be implemented. Yeah, in the end, it dosen’t matter. What does is what Kingdom you ally yourself with.

  • piccadillybabe

    It pays big dividends to be on good terms with other nations and not strong arm them with international law regulation and sanctions especially when they hold so much of our debt. Putin seemed to barely be tolerating us during the Crimean occupation and eventual election of the Ukraine people. If the Chinese and Russians start dumping our debt, we will be begging for mercy. Just because Washington treats Americans like yesterday’s news and gets away with it does not mean they can go treat the rest of the world that way.

  • Daniel

    Ahem, it’s really still all about who did 911 and arresting them sumbitches isn’t it? What am I missing. Is it okay to say that the USA and Israel did 911?

    • EvenAtomTan

      Nothing happened on 9/11 … it was all just special effects and CGI on TV.

      • Guest

        Yeah, the North and South Towers and Building 7 didn’t really fall. That was just special effects.

        • EvenAtomTan

          Of course it was!! They’re still standing.

          • Guest

            Right. And nothing hit the Pentagon either. That was special effects, too.

          • EvenAtomTan

            Of course it was … you’re just affected by the mind control drugs.

          • Guest

            And when you look in your bathroom mirror, your reflection is just special effects because you don’t really exist.

          • EvenAtomTan

            The drugs are quite insidious … they make you believe all sorts of nonsense.

          • Guest

            I don’t take any drugs–not even aspirin.

          • EvenAtomTan

            Of course not! The government’s giving them to you without your knowledge.

          • Charlotte

            Hormonal birth control pills are in the water… many millions of women are on them and each dose they take goes through their bodies, down the plumbing, into the rivers and into our water supply. The excess estrogen is causing problems for men such as low testosterone and lower fertility. That’s the real way drugs are unknowingly being given to the American public.

    • wk

      You probably think we did not land on the moon too.

      • Dani

        Not in 1969 we didn’t.

        • wk

          When do you think we did

  • Drud

    “So What Comes Next?” That’s the question, isn’t it? Personally, when I first started learning about the Fed, Debt-based Fiat currencies, economic collapse, etc.–you know all those conspiracy theorist nut-job, outsider websites that I now call home–I fully expected a full-blown, Hollywood, one-minute everything’s-fine-and-the-next-we-are-living-in-a-post-apocalyptic-nightmare-realm style Collapse within a month. The reason for this expectation is not that I am a fearful, paranoid person, but simply that the numbers are just that bad. Now, flash-forward three years or so and while I a no longer suffering (at least not acutely) from normalcy-bias (the idea that today is pretty much like yesterday, so tomorrow will be pretty much like today, ad-infinitum) I am suffering from prediction fatigue. I question myself all the time about whether we are the verge of collapse at all and whether the clowns in charge can keep the house of cards from toppling for years and decades down the road. And who can blame me? I can still walk into any of thousands of stores, hand the clerk a small plastic rectangle and walk out with virtually anything I need and could ever want. I get water, gas and electricity streaming into my home 24 hours a day every day, and I can go virtually anywhere I want at “a mile a minute, while picking (my) nose and listening to the radio.” (that line borrowed from the late great Mr. Vonnegut). Anyway, I am certain there will be a time, and most likely within the next decade, that these thing will no longer be true for myself or for hundreds of millions of other Americans. But, how will that transition occur, how long will it take, how much pain and suffering will come as a result? These questions I have no answer for and no one else does either. We can all make guesses, but in predicting the infinite possibilities of an unknown future there is plenty of room for any and all predictions to be wrong.

  • K

    This K is not me

    • wk

      Someone must be messing with us.

      • K

        You do wonder. I would not think the system would allow this. I have seen this elsewhere. At first they post thinks that the original person might have posted. Then they start posting outlandish things, to try to ruin the original posters reputation.

  • Mike Smithy

    Amerika has been dead for some time and the republic is collapsing at breakneck speed. TPTB will try to hold it together at the end of a gun, but when you can’t afford bread and circuses any more, things get ugly. The new dark ages are coming fast with serfdom the fate for most. Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants but DEBT is the money of slaves.

  • JSB

    Today, Yahoo headline reads: “Better news on US economy drives stocks higher.” I don’t get it.

    • Mike Smithy

      Didn’t you get the memo on the QE paradigm? Pursuant to the normal, bad news is now good news and good news is still good news. There are no longer stawk market fundamentals so BTFATH.

  • Jean Bush

    This whole this is deliberate engineered to bring about the collapse of the petrodollar, so they can instigate a currency reset and put all countries into a resourced based currency basket. This is probly what is meant by a one world currency.

  • Bruce

    When the collapse happens Politicians and the elite will ALL have targets on their backs. Angry, hungry and destitute people will hunt them down like rabid dogs and slaughter them for their undeniable part in the collapse.

  • $30B less in the markets each month since December… ZH had an interesting read about Belgium suddenly becoming the 3rd largest holder of treasuries in the world…

  • ob

    Oh come now. There will be no rate increases. Amazing how we have a century of Federal Reserve dovishness as evidence, and yet a few sweet promises of fiscal responsibility lead even the blogosphere to fall into line and become believers. The Fed is trapped. There is simply no credible way for them to unwind QE without imploding the world. Yellen sounds like a timid, semi-intelligent academic. She will be no Volcker.

  • FirstGarden

    One day I went out to start my car. It was a trusty old car with a powerful engine. I used it & abused it forever. I made many adjustments and quick fixes along the way. I dumped in “Overhaul In A Can”, “STP”, “Motor Honey” and all kinds of crap to keep it going. By now, it was knocking, letting loose black smoke and spewing water out the tailpipe. I went to adjust the carburetor once again, only to find that as I turned the screw, nothing happened. In & out I turned it.. nothing. As my engine rocked & chugged along, and frequently stalled, I faced the fact that I needed a complete overhaul. Only one problem. I was totally broke.

  • FirstGarden

    “If free market forces are allowed to prevail, it is inevitable that interest rates on U.S. debt will go up substantially, and that will mean higher interest rates on mortgages, cars, and just about everything else.”

    The forces must prevail. It’s just a matter of time. You cannot forever delay the inevitable – that is, the laws of Sowing and Reaping, Cause and Effect.

  • FirstGarden

    Louis T. McFadden,-Chairman of the House Banking Committee-(1928-1935)

    After two attempts on his life in 1933-1934, McFadden died “mysteriously” in 1935.

  • FirstGarden

    In his First Inaugural Address, Lincoln made a point to discuss the role of Capital and Labor. Significant national issues were, at that time, in the first official speech, immediately after a Presidential Election.

    Lincoln spoke on finances and gov’t: “In his First Annual Message to Congress, December 3, 1861, Abraham Lincoln stated:

    “Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed, if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration. Capital has its rights, which are as worthy of protection as any other rights.”

    President Lincoln needed money to finance the Civil War, and the international bankers offered him loans at 24-36% interest. Lincoln balked at their demands because he didn’t want to plunge the nation into such a huge debt. Lincoln approached Congress about passing a law to authorize the printing of U.S. Treasury Notes. Lincoln said “We gave the people of this Republic the greatest blessing they ever had – their own paper money to pay their debts…”

    Lincoln printed over 400 million “Greenbacks” (debt and interest-free) and paid the soldiers, U.S. government employees, and bought war supplies. The international bankers didn’t like it and wanted Lincoln to borrow the money from them, so that the American people would owe tremendous interest on the loan.

    Lincoln’s solution made this seem ridiculous. Shortly after Lincoln’s death, the government revoked the Greenback law which ended Lincoln’s debt-free, interest-free money. A new national banking act was enacted and all currency became interest-bearing, debt instruments, again.

  • FirstGarden

    Napoleon Bonaparte-(1769-1821) Emperor of France(1804-1815)

    Had a free hand in Europe as long as he borrowed from the Bank of Rothschilds. When he quit borrowing he was attacked by the English.

    Napoleon, a sympathizer for the international bankers, turned against them in the last years of his rule. He said:

    “When government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes… Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.”

  • FirstGarden

    Alexander Hamilton-(1755-1804)

    Founded the first central bank in the United States. International bankers saw that interest-free scrip would keep America free of their influence, so by 1781 banker-backed Alexander Hamilton succeeded in starting the Bank of America.

    After a few years of “bank money”, the prosperity of “Colonial Scrip” was gone. Benjamin Franklin said,

    “Conditions were so reversed that the era of prosperity had ended and a depression set in to such an extent that the streets of the Colonies were filled with the unemployed!”

    Bank money was like our FED money. It had debt and interest attached.

    By 1790 Hamilton and his bankers had created a privately owned central bank and converted the public debt (interest-free) into interest bearing bonds, payable to the bankers. When Hamilton’s bank charter expired in 1811, the international bankers started the war of 1812.

    By 1816, another privately-owned U.S. bank was started with $35 million in assets – only $7 million of that was owned by the government. This bank lasted for 20 years. U.S. history shows that currency with debt and interest attached created a depression.

    {Alexander Hamilton was killed in a duel, in 1804 by Aaron Burr, a British Sympathizer.}

  • FirstGarden

    Those who fought and died in the War of 1812

    Another English War of Conquest- The Bank of England financed this renewed attempt to get control of our
    Commerce, Trade, and Money Systems.

    From the autobiography of Ben Franklin, as reported by
    Gertrude Coogan in “Money Creators”:

    …the inability of the colonists to get the power to issue their
    own money permanently out of the hands of George III and the
    international bankers was the PRIME reason for the
    Revolutionary War.

    Ben Franklin answering a question about the booming
    economy of the young colonies: “That is simple. In the
    colonies we issue our own money. It is called Colonial Scrip.
    We issue it in proper proportions to the demands of trade and
    industry.” (Colonial Scrip had no debt or interest attached.

  • Lars Lonte

    The EIR News Michael C. Rupperts daily Peak Oil Blog Peak Oil and 9.11. American Free Press

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