G. Edward Griffin: Protectors of the Public

This is the third installment in a series of chapter summaries from G. Edward Griffin's must-read book The Creature From Jekyll Island.  This book may be the most important "red pill" available and we highly recommend that you buy and read the full book at RealityZone.

G. Edward Griffin

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Chapter 3 Summary: Protectors of the Public

The game called bailout is not a whimsical figment of the imagination, it is real. Here are some of the big games of the past and their final scores. 

In 1970, Penn Central railroad became bankrupt. The banks which lent the money had taken over its board of directors and had driven it further into the hole, all extending bigger and bigger loans to cover the losses. Directors concealed reality from stockholders and made additional loans so the company could pay dividends to keep up the false front. During this time, the directors and their banks unloaded their stock at unrealistically high prices.  When the truth became public, the stockholders were left holding the empty bag. The bailout, which was engineered by the Federal Reserve, involved government subsidies to other banks to grant additional loans. Then Congress was told that the collapse of Penn Central would be devastating to public interest. Congress responded by granting $125 million in loan guarantees so that banks would not be at risk.  The railroad eventually failed anyway, but the bank loans were covered. Penn Central was nationalized into AMTRAK and continues to operate at a loss.

In 1970, as Lockheed faced bankruptcy, Congress heard essentially the same story. Thousands would be unemployed, subcontractors would go out of business, and the public would suffer greatly. So Congress agreed to guarantee $250 million in new loans, which put Lockheed 60% deeper into debt than before.  Now that government was guaranteeing the loans, it had to make sure Lockheed became profitable.  This was accomplished by granting lucrative defense contracts at non-competitive bids.  The banks were paid back.

The Journey to Jekyll Island

This is the first installment in a series of chapter summaries from G. Edward Griffin's must-read book The Creature From Jekyll Island.  This book may be the most important "red pill" available and we highly recommend that you buy and read the full book at RealityZone.

G. Edward Griffin

Buy Here

Activist Post

Chapter 1 Summary: The Journey to Jekyll Island

The basic plan for the Federal Reserve System was drafted at a secret meeting held in November of 1910 at the private resort of J.P. Morgan on Jekyll Island off the coast of Georgia.  Those who attended represented the great financial institutions of Wall Street and, indirectly, Europe as well. The reason for the secrecy was simple.  Had it been known that rival factions of the banking community had joined together, the public would have been alerted to the possibility that the bankers were plotting an agreement in restraint of trade -- which, of course, is exactly what they were doing.  What emerged was a cartel agreement with five objectives: stop the growing competition from the nation's newer banks; obtain a franchise to create money out of nothing for the purpose of lending; get control of the reserves of all banks so that the more reckless ones would not be exposed to currency drains and bank runs; get the taxpayer to pick up the cartel's inevitable losses; and convince Congress that the purpose was to protect the public.  It was realized that the bankers would have to become partners with the politicians and that the structure of the cartel would have to be a central bank.  The record shows that the Fed has failed to achieve its stated objectives.  That is because those were never its true goals.  As a banking cartel, and in terms of the five objectives stated above, it has been an unqualified success.

Get the book for yourself or for others you want to wake up.  Visit RealityZone for your copy today. Summary is re-printed with permission from G. Edward Griffin.


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Quote of the Day: Griffin on Inflation by the Fed

Activist Post

"The American people have no idea they are paying the bill.  They know that someone is stealing their hubcaps, but they think it is the greedy businessman who raises prices or the selfish laborer who demands higher wages or the unworthy farmer who demands too much for his crop or the wealthy foreigner who bids up our prices.  They do not realize that these groups also are victimized by a monetary system which is constantly being eroded in value by and through the Federal Reserve System." -- G. Edward Griffin, The Creature From Jekyll Island, pg. 33.

Find more of G. Edward Griffin's work at the RealityZone.com or a Freedom-Force.org.

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The Titanic: The Mass Murder That Created the Federal Reserve Bank and the New World Order’s 20th Century?

Editor's Note: Interrupting Your Regularly Scheduled Programming... 

Steve Stars
The Intel Hub

Was the Titanic a death trap designedto murder billionaires like John Jacob Astor who withstood J. P. Morgan and Rockefeller’s plan for the Federal Reserve banking system now robbing the entire world, while financing international wars?

Before you dismiss this as “conspiracy theory” you might want to read the book “Futility, the Wreck of the Titan” published in 1898, which predicted this event in almost exact detail 14 years before it happened!

The novel is about a ship called the Titan, the largest ocean liner in the world that sinks in the North Atlantic after hitting an ice shelf—virtually identical to the Titanic disaster.

How to Start Your Own Private Currency

It's not as complicated as it sounds. You can "back" it with gold, or mimic an I.O.U. for one hour's worth of work. All you need is a system other people can understand and, most importantly, trust.

Alternative currency Berkshares

Derek Thompson
The Atlantic

Here's a nightmare scenario shared by some mainstream investors, goldbugs and Ron Paul devotees: The year is 2013. Inflation has the U.S. economy in a stranglehold. International investors are fleeing to the far corners of the globe. The dollar is in a free fall, and Americans are scurrying to protect their wealth. What do you do?

Start your own currency.

It sounds complicated, but really it's as simple as three steps. First, amass a bank of stuff. Let's say gold. Second, decide on a sensible unit for your new currency. Let's say one "Derek Dollar" token is worth a gram of gold. Third, convince a critical mass of people to use it so that "Derek Dollars" are redeemable not just within my group of friends, but among shops and merchants around the world. Voila, we've got our own private currency.

No gold? No problem. The easiest way to start a currency is to draw up an I.O.U. system that allows your friends to trade hours of work. Hundreds of shops in Ithaca, NY, accept "Ithaca HOURs," a local currency backed, not by gold, but by man-hours. I spend an hour mowing an Ithaca lawn and receive a paper note for one HOUR. I walk to the barber's, hand him the piece of paper, and he cuts my hair. Now my neighbor's grass is shorter, my hair is kempt, and my barber is one HOUR richer. And it's all thanks to transactions that might not have happened were it not for a private currency.

Read Full Article

RELATED ARTICLES:
Monetary Reform Begins with Competing Currencies
The After-the-Fed Solutions Debate Begins


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Fed fines Venezuelan state-owned bank

Editor's Note: The pot calling the kettle black. The Fed alleges BIV has "recklessly unsafe and unsound" management. 

Banco Industrial de Venezuela (BIV) branch
© AFP/File Juan Barreto

AFP

WASHINGTON (AFP) - The Federal Reserve announced sanctions against a Venezuelan state-owned bank on Friday, imposing fines and telling the bank to clean up its act.

The Fed imposed fines totaling $1.8 million against the Banco Industrial de Venezuela for allegedly "recklessly unsafe and unsound" management.

In addition the bank will not be allowed to make new loans or take on new customers without first getting permission from regulators and imposing reforms.

The Venezuelan government took the bank into conservatorship in 2009 amid allegations of corruption and mismanagement. It rescinded that move earlier this year, but remains the major shareholder.

© AFP -- Published at Activist Post with license


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7 Real Conspiracies

Activist Post

Activist Post writer, Brandon Turbeville, has just released his second book: 7 Real Conspiracies.  Brandon is known for his detailed research, principally in the area of Codex Alimentarius.  In his new book, he uncovers additional facts about the overall global agenda of control that works in tandem with the restrictions on health freedom he has uncovered.   

Visitors to alternative news sites might be familiar with many of the conspiracies that now have a mountain of evidence to support their validity.  Yet, even frequent visitors will find new information here, as he presents the 7 most blatant conspiracies for those who are open to seeing the available information, then shows how they intertwine to form one overarching agenda.

We encourage you to support his work and use this book to educate others about the lies, cover-ups, distortions, and agenda of dehumanization that has been unfolding for a very long time.  7 Real Conspiracies is an excellent companion piece to the classics in alternative literature.

The 7 Conspiracies Revealed

Jesse Ventura on the View: "The Fed runs our country" (Video)

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Supreme Court Rules The Fed Has 5 Days to Release Records to Bloomberg

Dees Illustration

Zero Hedge

In a crushing blow against the Fed and the banks that own it, in this case represented by the Clearing House Association, the Supreme Court rejected an industry appeal set forth by the CHA, that sought to keep critical bailout data from going public. The lawsuit was originally started by the great and late Mark Pittman, who tragically passed away around Thanksgiving 2009: we are confident we would be delighted to learn that his unprecedented act of suing the Fed in order to generate more transparency has finally succeeded.

From Bloomberg:

The justices today left intact a court order that gives the Fed five days to release the records, sought by Bloomberg News’s parent company, Bloomberg LP. The Clearing House Association LLC, a group of the nation’s largest commercial banks, had asked the Supreme Court to intervene.

The order marks the first time a court has forced the Fed to reveal the names of banks that borrowed from its oldest lending program, the 98-year-old discount window. The disclosures, together with details of six bailout programs released by the central bank in December under a congressional mandate, would give taxpayers insight into the Fed’s unprecedented $3.5 trillion effort to stem the 2008 financial panic. 

“I can’t recall that the Fed was ever sued and forced to release information” in its 98-year history, said Allan H. Meltzer, the author of three books on the U.S central bank and a professor at Carnegie Mellon University in Pittsburgh.

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Ratigan EXPOSES the Bankster Con on America (Video)

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Fed's Bernanke to give rare press conference

© AFP/Getty Images/File Alex Wong

AFP/Activist Post

WASHINGTON - The head of the US Federal Reserve will take questions from the press Thursday, a step that experts say is just short of revolutionary for the normally reserved central bank.

Instead of delivering an ever-so-carefully manicured speech and then slipping off the dais to the echo of gentle applause, Chairman Ben Bernanke will, unusually, hang around for a few questions from the press before departing.

It's a seemingly small step, but Bernanke knows any unscripted response he utters will be parsed, reported on and put to work by investors, with billions if not trillions of dollars at stake.

While Fed chairmen have occasionally given interviews and spoken to journalists off the record, formal press conferences by a sitting chairman are a rarity.


During the financial crisis Bernanke appeared with then-Treasury secretary Hank Paulson to explain how they proposed to rescue the US banking system, but by-and-large the Fed has stuck to carefully crafted speeches and meeting statements to get its point across.

But with the economy still shaky and most of the Fed's policy ammunition expended -- interest rates could not be lower and billions of dollars are being spent on stimulus -- Bernanke hopes to mold the economy in another way, wielding his influence through the press.

It is a radical change for an institution that just decades ago did not even inform the public about its interest rate decisions -- any central bank's main policy tool.

While a press conference is not the Fed's first choice, it is a necessary one, according to James Hamilton, an economics professor at the University of California and former Federal Reserve visiting scholar.

"It used to be that the Fed's main policy tool was to set interest rates. In that situation communication amounted to what that rate was going to be," he said.

But today, he added, "expectations of what the Fed is going to do next are a critical component of its policy and its ability to affect things."

"They are facing a new challenge with an old problem."

By simply adjusting expectations about future policies, growth, inflation, unemployment the Fed will hope to influence how the economy behaves in the future and how markets react.

As a top Fed policy panel recently put it, a "greater public understanding of the committee's interpretation of its statutory objectives could contribute to better macroeconomic outcomes."

Bernanke will also hope to avoid a repeat of the recent reaction to his $600-billion plan to prime the economy, which was condemned by some as unnecessary even as the Fed struggled to convey that it thought growth and inflation were too low.

A press conference is needed to improve the Fed's standing after anger at bank bailouts, according to Mark Calabria, a former Senate staffer now with the Cato Institute, a libertarian think thank.

"A lot of this is geared at trying to rebuild the public perception of the Fed," he said, citing the damage done by the Fed's recent involvement in hot button political issues.

But for Bernanke, the pitfalls are many and varied.

For years he has watched -- perhaps with just the slightest hint of schadenfreude -- as his Japanese and European counterparts struggled to navigate regular press conferences without prompting a market meltdown.

"There is a risk that you say things a little spontaneously, and that is never what you want from the central bank," said Hamilton.

If history is anything to go by, Bernanke could just as easily trip up by misjudging the sporting affiliations of the press pack as answering the question of an attractive Wall Street journalist in too direct a way.

His European Central Bank counterpart Jean-Claude Trichet was once heckled at a press conference in Germany for mentioning the national team's soccer World Cup defeat at the hands of Spain the night before.

Bernanke himself once admitted to a "lapse in judgement" after commenting very directly about interest rates after a female newsreader's dinner question.

He will be hoping for no similar lapses of judgement on Thursday, or risk damaging the Fed's credibility.

"The Fed, under the enlightened leadership of Ben Bernanke, is rapidly losing its credibility," warned Ed Yardeni of Yardeni Research.
© AFP

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PIIGS Return to the Slaughter

Chris Gaffney
Daily Reckoning

St. Louis, Missouri – Friday is finally here… The end of what has been an exhausting week here on the trade desk. The dollar continued to get beat down through most of the trading day but started to rally back a bit in the afternoon. Overnight the dollar actually gained with the highflying Nordic currencies falling almost 1% versus the greenback. The euro (EUR) and commodity-based currencies also sold off a bit, and the sharp rally in both gold and silver stalled. A break in all of the price action was to be expected, but it may not last long as we will get the October US jobs report later this morning.

The report due out at 7:30 CST is expected to show the unemployment rate stayed dangerously close to 10% during last month. If the jobless rate comes in at 9.6% as expected, it would be a record 15 straight months that the rate stayed above 9.5%. The FOMC has tied future QE bond purchases to the performance of the US economy, so a poor payroll number will probably lead to another dollar sell-off. On the other hand, if the employment numbers come in stronger than expected, we could see some traders shift to thinking the Fed won’t have to continue the stimulus for as long as they have announced. But this is wishful thinking, as we all know the Fed is like a 17 year-old teenager whose parents just gave them $100 to go to the mall; the $600 billion is all but spent already, and there will probably be more to follow!!

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RELATED ARTICLE:
Powerful EU Nations May Reform “Mission Impossible” Treaty in Secret
Will the Dollar Rebound Before Being Dissolved Into Global Currency?

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Volcker calls Fed plan an "illusion", won't boost economy

Kelly Olsen
Associated Press

SEOUL, South Korea — Former Federal Reserve Chairman Paul Volcker says the U.S. central bank's plan to buy hundreds of billions of dollars in government bonds probably won't do much to boost the economic recovery.

The Fed announced Wednesday that it would purchase $600 billion in Treasurys, aiming to lower long-term interest rates in an effort to spur spending and ultimately lower the U.S. unemployment rate, currently at 9.6 percent. The move comes on the heels of previous purchases of $1.7 trillion in mortgage and Treasury bonds.

Volcker told a business audience in Seoul that the Fed's bond plan is obviously an attempt to spur the U.S. economy but "is not the kind of action that's likely to change the general picture that I've described as slow and labored recovery over a period of time."


The Fed's move has caused worries in South Korea and other emerging markets in Asia. Those governments fear that lower interest rates in the U.S. will further push investors to seek higher returns overseas and that this tide of money will drive up their currencies and destabilize their markets.

Volcker served as Fed chief from 1979 until 1987 under presidents Jimmy Carter and Ronald Reagan and is currently chairman of President Barack Obama's Economic Recovery Advisory Board. He also warned that the U.S. won't find its way out of the economic doldrums through over-stimulation.

"The thought that you can create a prosperous economy by inflating is an illusion, in my judgment," he told reporters after his speech. "And we should never forget that. I thought we'd learned that lesson and I hope we continue to learn that lesson."

The Fed faces a dilemma in balancing the aim of boosting the economy now while avoiding fears of a future jump in inflation due to the monetary stimulus, said Volcker, who as central bank chairman hiked interest rates aggressively to tame inflation.

"The influence of this kind of action on longer term interest rates, in particular, is ambiguous because the immediate impact of buying bonds ought to be to drive bond prices up and interest rates down," he said. "But if people get concerned about longer run inflationary impacts, the effects go in the other direction."

In theory, the Fed's action is expected to lower interest rates because bond prices and interest rates – also known as yields – move in opposite directions. The yield is the fixed amount of annual interest paid to the owner of the bond expressed as a percentage of the bond price, so the extra demand created by the Fed's purchases should push bond prices up and lower the yield.

But when investors fear inflation will be higher in the future they demand that bonds pay a higher interest rate to protect their investment from the value-eroding effects of inflation.

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The Fed's 'pact with the devil' now the only stimulus game in town

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Tom Raum
Associated Press

WASHINGTON — Any more stimulus spending by President Barack Obama and Congress is dead, after this week's election blowout by the Republicans. Yet, Federal Reserve Chairman Ben Bernanke's "Hail Mary" pass to pump $600 billion into the banking system is really stimulus spending under another name.

The Fed won't be spending taxpayer money or borrowing from China. It will be doing the electronic equivalent of creating dollars out of thin air. The central bank will then use the new money to buy longer-term government bonds. The Fed's plan will initially increase the supply of dollars held by banks, hopefully spurring more lending.

If all goes according to Bernanke's script, the bond purchases – $75 billion a month for eight months – should force down yields, taking with them interest rates for homeowners, consumers and businesses. It should also help make U.S. goods more competitive overseas and keep alive a stock market rally that began in August.


All of that should boost economic growth, help the ailing housing market and encourage more hiring.

It may not work. And there are risks.

Printing so much new money could lead to runaway inflation down the road. Lower interest rates could also produce speculative bubbles in the price of oil and other commodities and in risky high-yield investments. It could also take pressure off the White House and Congress to confront the long-term deficit crisis.

Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City, calls it "a pact with the devil." He was the only dissenter in the Fed policy committee's 10-1 vote for the Fed effort, also known as quantitative easing.

The bold move – carefully choreographed since last summer – came as the central bank was starting to run out of arrows in its quiver. Its main weapon for revving up or slowing down the economy is adjusting short-term interest rates. But, given the magnitude of the downturn, the Fed has held those rates at near zero since December 2008.

Fed leaders figure the $600 billion bond-buying program will provide a modest boost to the economy over the next year, but they acknowledge that the jobless rate, now at 9.6 percent with nearly 15 million unemployed, will stay high. And it could even rise in the next few months.

It is the Fed's second experiment with buying bonds on the open market. From December 2008 to this past March, it bought $1.7 million in Treasurys and mortgage-backed securities. But since then, the recovery has faltered.

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