Posted by: Reb
« on: November 08, 2011, 10:14:21 AM »[continuation of article]
“Aha!” exclaims a disciple of the Fed. “The above analyze proves the integrity of the Fed. The $8.4 trillion is obviously being used to pay the redeemed securities and the sale and redemptions are off-setting.” And thus would the Fed beguile the naïve. Indeed, the Treasury’s receiving the value from auctions for that purpose is widely proclaimed in media publications. Treasury financial statements claim “borrowing from the public” finances government operations. However, direct transfer of money from the public cannot, in any way, expand the monetary system or result in the creation of fiat money (i.e., inflation) any more than can the payment of taxes by a private entity. The label is deliberately misleading.
The confusion actually confirms the scenario developed herein. When $8.4 trillion in securities is transferred from the Treasury to the Fed, there is a credit on an account of the Treasury (but is considered a liability in a Fed account titled federal reserve notes) and an asset entry in an account of the Fed (titled T-securities). The $8.4 trillion book-entry for the Treasury is used to pay the $7 trillion redeemed securities with $1.4 trillion being available for deficit spending by Congress. The T-securities possessed as an asset by the Fed are sold at auction and the $8.4 trillion belongs to the Fed. Where the value from the auctions is entered into the books of the Fed, and to where the $8.4 trillion goes, is not available information. This is how the fiat money of inflation is created as detailed earlier. It is assumed the IRS knows nothing of this income or profit. Whether Title 12 section 531 or some other provision excludes such income for the corporate Fed from taxation is for Congress to determine. However, taxation of the Fed is completely different from taxation of shareholders of the BOG..
Observe the deficit spending of $1.4 trillion requires Congressional approval. The $7 trillion roll-over requires no Congressional action but occurs pursuant to 31 USC #3111. With the national debt at approximately $15 trillion, the average maturity of Treasury securities would be about one year. The interest on the national debt is shown as an expense on the government’s balance sheet. The $7 trillion from the sale of the roll-over securities is not included in government accounting and is concluded to be a profit for the Fed. Assurance has been received the Fed makes no profit from the dealings, but documentation is totally absent.
Every dollar of inflation is profit for the Fed yet it does not show up on any Income statement or Balance sheet of the Fed. The entire $8.4 trillion is potentially clear profit. Profit of the Fed has been identified by the courts as belonging to the government. Title 12 section 247 imposes upon the BOG a responsibility: “The Board of Governors of the Federal Reserve System shall annually make a full report of its operations to the Speaker of the House of Representatives, who shall cause the same to be printed for the information of the Congress.” The law provides that “Whoever embezzles, steals, purloins…money or thing of value of the U.S…” is guilty of a crime. Ref. 18 USC 641. Anyone who knowingly “covers up by any trick, scheme, or device a material fact” of a fraud against the United States can be imprisoned for not more than five years. Ref. 18 USC 1001. Each auction would be a separate indictment count. In addition, if two or more individuals “conspire…to defraud the U.S. (and) effect the object of the conspiracy” they are each punishable by incarceration. Ref. 18 USC 371. Anyone knowing of such an offense who “relieves, comforts or assists the offender…to prevent his apprehension, trial or punishment, is an accessory after the fact.” Ref. 18 USC section 3.
Does this include any Congress-critter who, after being informed of this knowledge, does not expose and prosecute the perfidy of the Fed?
INITIATING THE SCAM---AND THE RESULT
Similar historic banking operations declared they loaned the value of the security to the king and therefore they should receive interest from the loan. The pretense is a sham. Congress and the Fed have agreed they are going to rip-off the public by devaluating the currency. Each party acquires purchasing power from the scheme. Congress gives a promise to pay (a security or collateral) which is given to the Fed and the Fed gives a promise to honor the government’s checks with fiat book-entry money (printing press money, i.e., FRN‘s, a legal tender--a debt of the FR.) A “legal tender” is a commodity that is required by law to be accepted for a contract stipulating another commodity (i.e., the original contract is for dollars; you must accept FRN). It is an acknowledgement of debt that can never be paid because there is no lawful money available. Title 12 section 411 clearly stipulates “(Federal Reserve notes) shall be redeemed in lawful money on demand at the Treasury Department of the United States… or at any Federal Reserve bank.” Good luck with that. You will only receive more debt of an under-capitalized federal corporation created by Wall Street bankers during a week-long retreat on Jekyll Island and blessed by a rump session of Congress.
To get the scheme started and the con game financed by third parties, it must have the appearance that interest is their source of profit and a gain must be made from the brokerage difference. A prime concern for the Fed under these conditions would be the difference in the value credited to the Treasury account and the value received from the auction. If the value of securities purchased by the public is transmitted directly to the Treasury, there cannot be any inflation, but then there is no gain to the Fed from book-entry money. The percentage taken by the Fed for profit can even be variable but is hidden without an audit.
If the Fed projected a guise of a brokerage firm selling government bonds to the public, it would be a simple arrangement with minimal investment or risk. The currency in circulation in 1913 was non-interest bearing U.S. Notes. After the operation was set up and the New York Federal Bank was handling the accounting, it would be a simple shift of accounting procedures to have the T-securities accepted by the FR Bank as owner instead of as a broker. The difference allows the Bank to create fiat money (inflation or Federal Reserve Notes) as a profit for the Bank. Whether this falls within the parameters of embezzlement depends upon many conditions.
The courts have repeatedly concluded the profits of the Fed belong to the United States. Ref. Scott v FRB of Kansas City, 405 F3d 532, 535; In Re Hoag Ranches, 846 F2d 1227. The fact that the income is not reported is suggestive of subterfuge.
To put $8.4 trillion in perspective, the 2010 operation of the U.S. government involved $3.4 trillion and that includes the $1.3 trillion deficit. The entire amount of taxes collected by the U.S. government was only $2.1 trillion.
Good luck on trying to follow this sequence in the accounting records. Even Enron, World Com, and Bernie were able to cook the books---and they were audited. The annual audit of the Fed for the ANNUAL REPORT TO CONGRESS follows accounting guidelines established by the Fed. Those guidelines do not permit the receipts and disbursements of T-security auctions being examined. Somehow the Fed has convinced Congress the provisions of 31 USC #714, which exempt foreign transactions, policy matters, and FOMC transactions, are applicable to virtually everything the Fed does. Senator Sanders had to pass legislation to modify the statute to obtain documentation on Maiden Lane transactions. How the exemptions apply to auction dealings is a source of bewilderment.
If asked “Who owns the T-securities that are sold at the auctions--the Fed or the U.S. government?” a Fed representative will respond “The securities are a liability of the government.” An astute observer will note the inquiry was avoided; it was not answered.
A newspaper article a couple of years ago informed us the annual increase in interest to be 15 percent while the budget only grew 7 percent. That reflects the exponential growth of interest. More recently the deficit has been increasing much faster to rescue financial institutes from default. Professor Bob Blain, Southern Illinois University, Edwardsville has graphed the exponential growth in debt from 1915 to be irregular only during the 1930’s.
In 1790 during Congress’ consideration of Alexander Hamilton’s proposal to pay the national debt with a usury based obligation placed upon the citizens, congressman James Jackson, after lengthy reflection on the devastation similar plans had imposed on European countries and cities, included the following observation to Congress:
“Let us take warning by the errors of Europe, and guard against the introduction of a system followed by calamities so universal…The funding of the debt will occasion enormous taxes for the payment of the interest…(such a system) must hereafter settle upon our posterity a burthen (sic) which they can neither bear nor relieve themselves from.” Ref. ANNALS OF CONGRESS, Vol. 1, 1790, pp. 1141-2.
In actual practice within the United States, a collection of taxes for part of the government spending is well known. Payment of part of the government expenses by taxation does not alter the government’s usury program; for analytical analysis they can stand alone. The ninety year pattern of increasingly larger deficit spending is the escalation as the climax of chaos beyond description approaches.
The end result of economic exploitation by usury is becoming transparent in Europe. As various nations become indebted to “financiers,” the demand to satisfy the debt includes the selling of national heirlooms and infrastructure to the creditors. Airports, roads, government buildings, and all resources are fair game. It will not be the Chinese or Japanese that acquire property. Market securities will be purchased at reduced prices by the Fed, and then the Fed will acquire assets at fire-sale prices. It will be the unknown shareholders of the BOG that acquire title. Ownership of land and resources by a financial oligarchy is but one example of feudalism—the government is mere facade.
The outstanding unfunded debt that is even now overhanging the citizens of the United States is more than enough to impose slavery if the people submit. If the people can be conditioned to believe they must pay the debt, the income tax (if it exists) can be used to confiscate 100 percent of their income and the masses must subsist on government largess. The Republic of sovereign citizens has been degraded to a totalitarian nation of obsequious vassals. The hallmark of every Great Society has been the confidence that each individual has been able to retain and enjoy the fruits of his labor, and that is being destroyed in the United States.
Benjamin Ginsberg documents in FATAL EMBRACE numerous times when societies have revolted against “financier’s” oppression. One interesting revelation by Ben is the Magna Carta was the result of Barons revolting after financiers had induced King John to invade Normandy. The Barons would have had to pay for the campaign. Ben laments the financiers subsequently had their estates confiscated and were exiled. War-mongering has been a consistent attribute of financiers. What the people of the U.S. will tolerate remains to be seen.
For decades, the economic exploitation of other nations, including orchestrated coups of elected non-compliant governments, has been the modus operand of the CIA, IMF, and World Bank. Ref. CONFESSIONS OF AN ECONOMIC HIT MAN by John Perkins; KILLING HOPE by William Blum; Google CIA; ROGUE AGENCY RUN AMUCK. It should be apparent the economic objective has been for the greed of financiers on Wall Street even when financed by, implemented with, and overseen by government bureaucracy including the U.S. military. The U.S. government gains nothing from Empire building. Now, as humongous deficits are demanded to give funds to the Fed and rescue financial institutes from their fraudulent scams even after QE1 and QE2 have depleted its coffers and international bankruptcy still looms, and after military facilities/actions throughout the world to protect their international economic exploitation have bankrupt the Nation, the chickens are coming home to roost.
[FN: Much has been made over the Federal Reserve banks being privately owned as distinguished from a government agency. The confusion is fueled by names and definitions.
The twelve FR Banks (incorporated, and franchisees ?) have been identified by courts as privately owned by the commercial banks (shareholders) each with a nine member board of directors---for the issues before the courts. FDIC is another FR corporation statutorily identified as a government agency. The FR Board of Governors is separately incorporated with unidentified shareholders (foreign and NY bankers ?). The BOG has complete administrative and supervisory control of the FR Banks---they can remove a director without cause or they can rescind a policy. The BOG has assumed the guise of a government agency but does not comport with the parameters of an agency as established by the courts nor with the legislated definition of an agency.
The FR system juggle adjudication and FOIA actions to obtain the best position of a private versus government status.]
References:
Dr. Bob Blain, Emeritus Professor of Sociology at Southern Illinois University, Edwardsville, in a published paper “Revisiting U.S. Public and Private Debt” released in 2008 observes the exponential increase in national debt from 1915 and the destruction inflicted upon historic societies by usury based monetary systems.
FATAL EMBRACE by Benjamin Ginsberg documents historic occasions in which a usury debt based economic system (but not so identified) resulted in the “financiers” facing public fury including deportation, confiscation of estates, and physical abuse of the individuals involved.
GREENSPAN’S BUBBLES; THE AGE OF IGNORANCE AT THE FEDERAL RESERVE by Bill Fleckenstein reveals how the Fed suppressed Federal Fund interest rates to create a false prosperity that devastated the economy for 20 years and destroyed the home construction industry.
THIS TIME IS DIFFERENT; EIGHT CENTURIES OF FINANCIAL FOLLY by Carmen Reinhart & Ken Rogoff reviews sovereign defaults as seen by an economist speaking to the International Monetary Fund/World Bank. It is the nature of governments to steal from the people.
“Aha!” exclaims a disciple of the Fed. “The above analyze proves the integrity of the Fed. The $8.4 trillion is obviously being used to pay the redeemed securities and the sale and redemptions are off-setting.” And thus would the Fed beguile the naïve. Indeed, the Treasury’s receiving the value from auctions for that purpose is widely proclaimed in media publications. Treasury financial statements claim “borrowing from the public” finances government operations. However, direct transfer of money from the public cannot, in any way, expand the monetary system or result in the creation of fiat money (i.e., inflation) any more than can the payment of taxes by a private entity. The label is deliberately misleading.
The confusion actually confirms the scenario developed herein. When $8.4 trillion in securities is transferred from the Treasury to the Fed, there is a credit on an account of the Treasury (but is considered a liability in a Fed account titled federal reserve notes) and an asset entry in an account of the Fed (titled T-securities). The $8.4 trillion book-entry for the Treasury is used to pay the $7 trillion redeemed securities with $1.4 trillion being available for deficit spending by Congress. The T-securities possessed as an asset by the Fed are sold at auction and the $8.4 trillion belongs to the Fed. Where the value from the auctions is entered into the books of the Fed, and to where the $8.4 trillion goes, is not available information. This is how the fiat money of inflation is created as detailed earlier. It is assumed the IRS knows nothing of this income or profit. Whether Title 12 section 531 or some other provision excludes such income for the corporate Fed from taxation is for Congress to determine. However, taxation of the Fed is completely different from taxation of shareholders of the BOG..
Observe the deficit spending of $1.4 trillion requires Congressional approval. The $7 trillion roll-over requires no Congressional action but occurs pursuant to 31 USC #3111. With the national debt at approximately $15 trillion, the average maturity of Treasury securities would be about one year. The interest on the national debt is shown as an expense on the government’s balance sheet. The $7 trillion from the sale of the roll-over securities is not included in government accounting and is concluded to be a profit for the Fed. Assurance has been received the Fed makes no profit from the dealings, but documentation is totally absent.
Every dollar of inflation is profit for the Fed yet it does not show up on any Income statement or Balance sheet of the Fed. The entire $8.4 trillion is potentially clear profit. Profit of the Fed has been identified by the courts as belonging to the government. Title 12 section 247 imposes upon the BOG a responsibility: “The Board of Governors of the Federal Reserve System shall annually make a full report of its operations to the Speaker of the House of Representatives, who shall cause the same to be printed for the information of the Congress.” The law provides that “Whoever embezzles, steals, purloins…money or thing of value of the U.S…” is guilty of a crime. Ref. 18 USC 641. Anyone who knowingly “covers up by any trick, scheme, or device a material fact” of a fraud against the United States can be imprisoned for not more than five years. Ref. 18 USC 1001. Each auction would be a separate indictment count. In addition, if two or more individuals “conspire…to defraud the U.S. (and) effect the object of the conspiracy” they are each punishable by incarceration. Ref. 18 USC 371. Anyone knowing of such an offense who “relieves, comforts or assists the offender…to prevent his apprehension, trial or punishment, is an accessory after the fact.” Ref. 18 USC section 3.
Does this include any Congress-critter who, after being informed of this knowledge, does not expose and prosecute the perfidy of the Fed?
INITIATING THE SCAM---AND THE RESULT
Similar historic banking operations declared they loaned the value of the security to the king and therefore they should receive interest from the loan. The pretense is a sham. Congress and the Fed have agreed they are going to rip-off the public by devaluating the currency. Each party acquires purchasing power from the scheme. Congress gives a promise to pay (a security or collateral) which is given to the Fed and the Fed gives a promise to honor the government’s checks with fiat book-entry money (printing press money, i.e., FRN‘s, a legal tender--a debt of the FR.) A “legal tender” is a commodity that is required by law to be accepted for a contract stipulating another commodity (i.e., the original contract is for dollars; you must accept FRN). It is an acknowledgement of debt that can never be paid because there is no lawful money available. Title 12 section 411 clearly stipulates “(Federal Reserve notes) shall be redeemed in lawful money on demand at the Treasury Department of the United States… or at any Federal Reserve bank.” Good luck with that. You will only receive more debt of an under-capitalized federal corporation created by Wall Street bankers during a week-long retreat on Jekyll Island and blessed by a rump session of Congress.
To get the scheme started and the con game financed by third parties, it must have the appearance that interest is their source of profit and a gain must be made from the brokerage difference. A prime concern for the Fed under these conditions would be the difference in the value credited to the Treasury account and the value received from the auction. If the value of securities purchased by the public is transmitted directly to the Treasury, there cannot be any inflation, but then there is no gain to the Fed from book-entry money. The percentage taken by the Fed for profit can even be variable but is hidden without an audit.
If the Fed projected a guise of a brokerage firm selling government bonds to the public, it would be a simple arrangement with minimal investment or risk. The currency in circulation in 1913 was non-interest bearing U.S. Notes. After the operation was set up and the New York Federal Bank was handling the accounting, it would be a simple shift of accounting procedures to have the T-securities accepted by the FR Bank as owner instead of as a broker. The difference allows the Bank to create fiat money (inflation or Federal Reserve Notes) as a profit for the Bank. Whether this falls within the parameters of embezzlement depends upon many conditions.
The courts have repeatedly concluded the profits of the Fed belong to the United States. Ref. Scott v FRB of Kansas City, 405 F3d 532, 535; In Re Hoag Ranches, 846 F2d 1227. The fact that the income is not reported is suggestive of subterfuge.
To put $8.4 trillion in perspective, the 2010 operation of the U.S. government involved $3.4 trillion and that includes the $1.3 trillion deficit. The entire amount of taxes collected by the U.S. government was only $2.1 trillion.
Good luck on trying to follow this sequence in the accounting records. Even Enron, World Com, and Bernie were able to cook the books---and they were audited. The annual audit of the Fed for the ANNUAL REPORT TO CONGRESS follows accounting guidelines established by the Fed. Those guidelines do not permit the receipts and disbursements of T-security auctions being examined. Somehow the Fed has convinced Congress the provisions of 31 USC #714, which exempt foreign transactions, policy matters, and FOMC transactions, are applicable to virtually everything the Fed does. Senator Sanders had to pass legislation to modify the statute to obtain documentation on Maiden Lane transactions. How the exemptions apply to auction dealings is a source of bewilderment.
If asked “Who owns the T-securities that are sold at the auctions--the Fed or the U.S. government?” a Fed representative will respond “The securities are a liability of the government.” An astute observer will note the inquiry was avoided; it was not answered.
A newspaper article a couple of years ago informed us the annual increase in interest to be 15 percent while the budget only grew 7 percent. That reflects the exponential growth of interest. More recently the deficit has been increasing much faster to rescue financial institutes from default. Professor Bob Blain, Southern Illinois University, Edwardsville has graphed the exponential growth in debt from 1915 to be irregular only during the 1930’s.
In 1790 during Congress’ consideration of Alexander Hamilton’s proposal to pay the national debt with a usury based obligation placed upon the citizens, congressman James Jackson, after lengthy reflection on the devastation similar plans had imposed on European countries and cities, included the following observation to Congress:
“Let us take warning by the errors of Europe, and guard against the introduction of a system followed by calamities so universal…The funding of the debt will occasion enormous taxes for the payment of the interest…(such a system) must hereafter settle upon our posterity a burthen (sic) which they can neither bear nor relieve themselves from.” Ref. ANNALS OF CONGRESS, Vol. 1, 1790, pp. 1141-2.
In actual practice within the United States, a collection of taxes for part of the government spending is well known. Payment of part of the government expenses by taxation does not alter the government’s usury program; for analytical analysis they can stand alone. The ninety year pattern of increasingly larger deficit spending is the escalation as the climax of chaos beyond description approaches.
The end result of economic exploitation by usury is becoming transparent in Europe. As various nations become indebted to “financiers,” the demand to satisfy the debt includes the selling of national heirlooms and infrastructure to the creditors. Airports, roads, government buildings, and all resources are fair game. It will not be the Chinese or Japanese that acquire property. Market securities will be purchased at reduced prices by the Fed, and then the Fed will acquire assets at fire-sale prices. It will be the unknown shareholders of the BOG that acquire title. Ownership of land and resources by a financial oligarchy is but one example of feudalism—the government is mere facade.
The outstanding unfunded debt that is even now overhanging the citizens of the United States is more than enough to impose slavery if the people submit. If the people can be conditioned to believe they must pay the debt, the income tax (if it exists) can be used to confiscate 100 percent of their income and the masses must subsist on government largess. The Republic of sovereign citizens has been degraded to a totalitarian nation of obsequious vassals. The hallmark of every Great Society has been the confidence that each individual has been able to retain and enjoy the fruits of his labor, and that is being destroyed in the United States.
Benjamin Ginsberg documents in FATAL EMBRACE numerous times when societies have revolted against “financier’s” oppression. One interesting revelation by Ben is the Magna Carta was the result of Barons revolting after financiers had induced King John to invade Normandy. The Barons would have had to pay for the campaign. Ben laments the financiers subsequently had their estates confiscated and were exiled. War-mongering has been a consistent attribute of financiers. What the people of the U.S. will tolerate remains to be seen.
For decades, the economic exploitation of other nations, including orchestrated coups of elected non-compliant governments, has been the modus operand of the CIA, IMF, and World Bank. Ref. CONFESSIONS OF AN ECONOMIC HIT MAN by John Perkins; KILLING HOPE by William Blum; Google CIA; ROGUE AGENCY RUN AMUCK. It should be apparent the economic objective has been for the greed of financiers on Wall Street even when financed by, implemented with, and overseen by government bureaucracy including the U.S. military. The U.S. government gains nothing from Empire building. Now, as humongous deficits are demanded to give funds to the Fed and rescue financial institutes from their fraudulent scams even after QE1 and QE2 have depleted its coffers and international bankruptcy still looms, and after military facilities/actions throughout the world to protect their international economic exploitation have bankrupt the Nation, the chickens are coming home to roost.
[FN: Much has been made over the Federal Reserve banks being privately owned as distinguished from a government agency. The confusion is fueled by names and definitions.
The twelve FR Banks (incorporated, and franchisees ?) have been identified by courts as privately owned by the commercial banks (shareholders) each with a nine member board of directors---for the issues before the courts. FDIC is another FR corporation statutorily identified as a government agency. The FR Board of Governors is separately incorporated with unidentified shareholders (foreign and NY bankers ?). The BOG has complete administrative and supervisory control of the FR Banks---they can remove a director without cause or they can rescind a policy. The BOG has assumed the guise of a government agency but does not comport with the parameters of an agency as established by the courts nor with the legislated definition of an agency.
The FR system juggle adjudication and FOIA actions to obtain the best position of a private versus government status.]
References:
Dr. Bob Blain, Emeritus Professor of Sociology at Southern Illinois University, Edwardsville, in a published paper “Revisiting U.S. Public and Private Debt” released in 2008 observes the exponential increase in national debt from 1915 and the destruction inflicted upon historic societies by usury based monetary systems.
FATAL EMBRACE by Benjamin Ginsberg documents historic occasions in which a usury debt based economic system (but not so identified) resulted in the “financiers” facing public fury including deportation, confiscation of estates, and physical abuse of the individuals involved.
GREENSPAN’S BUBBLES; THE AGE OF IGNORANCE AT THE FEDERAL RESERVE by Bill Fleckenstein reveals how the Fed suppressed Federal Fund interest rates to create a false prosperity that devastated the economy for 20 years and destroyed the home construction industry.
THIS TIME IS DIFFERENT; EIGHT CENTURIES OF FINANCIAL FOLLY by Carmen Reinhart & Ken Rogoff reviews sovereign defaults as seen by an economist speaking to the International Monetary Fund/World Bank. It is the nature of governments to steal from the people.