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View Diary: China Cuts US Credit Rating. Obama Cuts Hawaii Vacation Short. (171 comments)

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  •  Um Hannah, when was the last time we actually (6+ / 0-)

    issued our own currency again?

    The authority of the Federal Reserve Banks to issue notes comes from the Federal Reserve Act of 1913. Legally, they are liabilities of the Federal Reserve Banks and obligations of the United States government. Although not issued by the Treasury Department, Federal Reserve Notes carry the (engraved) signature of the Treasurer of the United States and the United States Secretary of the Treasury.

    We haven't issued our own currency since 1913.

    -7.62; -5.95 The scientists of today think deeply instead of clearly. One must be sane to think clearly, but one can think deeply and be quite insane.~Tesla

    by gerrilea on Wed Dec 26, 2012 at 04:07:27 AM PST

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    •  The Federal Reserve Bank is a corporation (42+ / 0-)

      created and authorized by Congress. The members of the board are appointed by the President, with advise and concurrence of the Senate. Thus, the Fed is a federal agency, an early example of privatization designed to give Congress distance from its obligations.
      Just as the Fed has been created by Congress, it can be abolished by Congress, as Ron Paul was heard to argue.
      Until about the year 2000, it was thought by the Fed that the U.S. economy could be effectively regulated (made regular) by simply jiggling the base interest rate that the Fed charges on loans made to its member banks. However, what seems to have finally registered is that increasing the cost of using money can effectively tamp down or even cause the real economy (the trade and exchange of real goods and services) to collapse, reducing the cost of money does not bring it back to life. That has now been demonstrated in spades and brought to light that whatever prompts hoarding is not easily reversed by the Central Bank.
      That certain segments of the U.S. population have been hoarding money is evidenced by the fact that the rate at which currency flows through the economy has been reduced by about 2/3. Moreover, since our system of taxation is set to recover money for public corporations as it moves, the slowing of the movement results in less being collected as taxes by states and municipalities, which do not issue their own currency. This result is not a happenstance. It is in the interest of private hoarders of currency for public revenues to be constricted so that these entities are forced to borrow currency at a premium by issuing bonds. It is hoped that, even thought the base interest rate set by the Fed is negligible, municipalities and states will be forced to borrow what they can't collect and even legislate new sources of revenue (mostly fees) to meet the nut of their long-term debts.
      Ironically, the difference between a sovereign issuer of currency and subsidiary organizations/corporations has now been highlighted by the reverse transition of the European nations to a common currency. The Euro experiment is a demonstration of what can happen when a country gives up its financial autonomy. The countries in the European Union and now finding themselves in the same precarious situation as our fifty states -- dependent on a central bank to manage the currency.  Which is why Italy, Spain and Greece are threatening to go back to using their own currency.

      In our case, both former and present Chairmen of the Federal Reserve have repeatedly stated that the U.S. cannot run out of money. However, the Congress has an interest in maintaining the fiction that money has to be rationed because that is where their power lies. At present, because the majority of the U.S. electorate has gone against the will of Congress and elected Barack Obama, the people have to be punished by curtailing their access and use of money. All of the previous privations (visited on mothers, students, old people, the injured and victims of natural disasters) have obviously been insufficient to prompt the electorate to vote "right."
      Barack Obama correctly identified that Republicans had crashed the economy (driven it into a ditch). However, he assumed, as did most of us, that it was an accident and/or the result of incompetence. Now we are learning that it was intentional. The sacrifice of Lehman Brothers in 2008 was a warning. When it wasn't heeded, the threat had to be carried out as a full-blown recession. By 2010, it looked like the lesson had been learned. However, the election of 2012 demonstrated that was a mistake and the Republican land-slide of 2010 was largely reversed. So, the economy has to be even more depressed.
      Why would people do that?  Because power is even more attractive and addictive than sex.

      We organize governments to deliver services and prevent abuse.

      by hannah on Wed Dec 26, 2012 at 04:58:53 AM PST

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      •  P.S. (24+ / 0-)

        We, the people, are the government. That is the reality which the royalists in Congress do not want to accept.

        We organize governments to deliver services and prevent abuse.

        by hannah on Wed Dec 26, 2012 at 05:00:35 AM PST

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      •  This sounds like ct (1+ / 0-)
        Recommended by:

        Please cite evidence of the conspiracy you've proposed. Who are these shadowy figures pushing our country into recession and what evidence do you have?

        •  The existence of the Fed (5+ / 0-)

          Is the conspiracy. The simple point is this: our government is borrowing money from a public/private bank and has to repay interest to said bank. wtf? The government prints the money, why should it have to borrow said funds from a bank that makes money through usury (which is banned in both the Bible and Koran)? Eliminate the Fed and our government gets rid of a huge amount of "debt."

          "Political ends as sad remains will die." - YES 'And You and I' ; -8.88, -9.54

          by US Blues on Wed Dec 26, 2012 at 07:45:35 AM PST

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          •  suggest you read the (2+ / 0-)
            Recommended by:
            Pluto, ozsea1

            history of the U.S. economy in the 18th and especially 19th and early 20th centuries to see why the Fed came into being. That should also give you a decent idea of what would happen if the Fed suddenly disappeared.

            It's not perfect, and does need reform, and lots of other shoulds and oughts, but exceedingly unrealistic to think it could be yanked overnight.

            We are often so identified with whatever thoughts we may be having that we don’t realize the thoughts are a commentary on reality, and not reality itself. -- Gangaji

            by Mnemosyne on Wed Dec 26, 2012 at 10:33:45 AM PST

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            •  The history of economics? Really? (0+ / 0-)

              The Fed came into being when the majority of Congress was home celebrating Christmas.  It wasn't done by "we the people", it was done by the fascist elites controlling our government at the time.

              Give me control of a nation's money and I care not who makes her laws

              ~Mayer Amschel Rothschild

              Within 20 yrs they collapsed the entire worlds economy and through their machinations, killed millions by withholding their money.


              They then instituted one of the greatest thefts of American wealth through gold confiscation.


              And they've repeated that process again and again.

              They did it when Nixon took us completely off the gold standard at Brenton Woods.

              They're trying to do it again.




              Now that we've established this history, review please the beginning quote from Rothschild.

              It is not about economics, its about total control and theft. They are above the law. Reference again, the HSBC deal.

              I must ask this: Why did we have a deflationary expansion for the first 120 yrs of this nations history before the Fed Res System?  Why did so many people including President Jackson fight against a "federal reserve system"???


              -7.62; -5.95 The scientists of today think deeply instead of clearly. One must be sane to think clearly, but one can think deeply and be quite insane.~Tesla

              by gerrilea on Thu Dec 27, 2012 at 09:36:27 AM PST

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        •  I suggest (11+ / 0-)

          Carroll Quigley's Tragedy & Hope, followed by a complete perusal of the website of Henry C.K. Liu.  You might also catch the Wiki article on the Rothschilde family. There is nothing terribly shadowy about the international world of finance, nevertheless their secretiveness is legendary.  They are both required to reveal their inmost secrets by a plethora of regulations in every developed nation on earth, and experts in pursuit of the financial shell-game despite those mandatory disclosures.  They have created both a mystique of their work as inherently too complex for most to understand, beginning with the difficulties of medieval accounting in Roman "numerals", and indulged during modern times in massive unnecessary but highly deceptive complexity.  Everything you need to know about international finance is hidden in plain sight, so it's hardly CT to reference it.  The annual get-together at Davos is reported in all the papers and magazines, as are the titles of the catchiest seminars and conferences.  Nevertheless most of the real "work" for attendees occurs in corners off of hotel corridors and at private meals.  There is no difficulty in finding out what, in general, the financier class is doing; the devil (and the CT) is in the details.

        •  This is not hidden from any (15+ / 0-)

          who can read and care to look.

          The case of Big Banks and Central Bankers acting in collusion to benefit their income and gain control of economies has been well documented, and that for over a Century.

          Look at the current LIBOR investigations, (already with some convictions)
          for a very modest example.

          They aren't called "Banksters" for nothing.

          The Internet is just the tail of the Corporate Media dog.

          by Jim P on Wed Dec 26, 2012 at 08:10:12 AM PST

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      •  Noted by Quigley in 1965: (7+ / 0-)

        "It is to be noted that the control of the central bank over the credit policies of local banks are permissive in one direction and compulsive in the other. They can compel these local banks to curtail credit and can only permit them to increase credit. This means that they have control powers against inflation and not deflation—a reflection of the old banking idea that inflation was bad and deflation was good."

        Carroll Quigley, Tragedy & Hope: A History of the World in Our Time

        I find it amusing that both the ineffectiveness of the Fed in combating recession/deflation and the fact that the monetary system was in general run of, by, and for the benefit of bankers was well known in 1965, but somehow has been entirely forgotten in the intervening half-century.  An obvious example of history repeating itself for those who don't bother to remember.

      •  Thanks for the detailed lesson here, the point is (1+ / 0-)
        Recommended by:

        the Congress does not print our money, a private banking cartel does, ie the Federal Reserve.

        A private corporation that does not pay taxes on the $38 billion a month we pay them in interest.

        -7.62; -5.95 The scientists of today think deeply instead of clearly. One must be sane to think clearly, but one can think deeply and be quite insane.~Tesla

        by gerrilea on Wed Dec 26, 2012 at 09:52:57 AM PST

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