Dark Skinny

In 1910, in a quiet backwater in Georgia at The Jekyl Island Hunt Club, there was a meeting whose simple purpose was the formation of US The Federal Reserve. Those who attended were: Senator Nelson Aldrich (Nelson Rockefeller’s maternal grandfather); A. Piatt Andrew, Economist and Assistant Secretary of the Treasury; Frank Vanderlip, President of the National City Bank of New York; Henry P. Norton, President of Morgan’s First National Bank of New York; Paul Moritz Warburg, a German who was partner in the New York banking house of Kuhn, Loeb Co.; Benjamin Strong, an aid to J. P. Morgan.

The Federal Reserve was incorporated in 1913 and has been creating a completely unnecessary National Debt ever since. In simple terms, the Fed creates money as debt. They create money  and credit out of thin air by nothing more than the ruse of “fractional lending” and a book entry. Whenever the members of the Fed make any loans, that debt money is the US money supply.

THE TEN ORIGINAL MEMBER BANKS OF THE FEDERAL RESERVE

All owned by the Rothschilds

Rothschild Bank of London
Warburg Bank of Hamburg
Rothschild Bank of Berlin
Lehman Brothers of New York
Lazard Brothers of Paris
Kuhn Loeb Bank of New York
Israel Moses Seif Banks of Italy
Goldman, Sachs of New York
Warburg Bank of Amsterdam
Chase Manhattan Bank of New York

Please note that The Rothschild family owns and runs all the above so-called “American Banks”. Therefore you could safely assume that the Rothschild family both runs and controls the whole of the American Banking System. Indeed, Rothschilds is an old European family which has dominated the European banking system for centuries. So not even an American runs the US banking system - a European family cartel manipulates it completely with impunity.

By 1850, the House of Rothschild represented more wealth than all the families of Europe. Shortly after William Patterson formed the Bank of England(est. 1695),  its control passed to Nathan Rothschild and here is how he did it:

Nathan Rothschild was an observer on the day the Duke of Wellington defeated Napoleon at Waterloo, Belgium. He knew that with this information he could make a fortune. He later paid a sailor a big fee to take him across the English Channel in bad weather. The news of Napoleon’s defeat would take a while to hit England. When Nathan arrived in London, he began selling securities and bonds in a panic. The other investors were deceived into believing that Napoleon won the war and was eyeing England so they began to sell their securities too. What they were unaware of is that Rothschild’s agents were buying all the securities that were being sold in panic. In one day, the Rothschild fortune grew by one million pounds. They literally bought control of England for a few cents on the dollar. The same way the Rockefeller’s went into Japan after World War 2 and bought everything 10 cents on the dollar. SONY=Standard Oil New York, a Rockefeller Company.

Nathan Mayer von Rothschild(1840-1915), 1st Baron Rothschild, once boasted:

“I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man that controls Britain’s money supply controls the British Empire, and I control the British money supply.”

Frederick Morton wrote in his book, The Rothschilds:

“…the wealth of the Rothschilds consists of the bankruptcy of nations.”

But the Fed staunchly maintains that they are a private institution who’s only function is to serve the US government and its citizens. Well of course they do !! So, purely out of interest, lets look at those Financial Institutions that Hank Paulson (ex-CEO of Goldman Sachs) and Ben Bernanke have “saved” in the recent TARP bail-out:

• Morgan Stanley
• Citibank
• Wells Fargo
  
• Goldman Sachs
• Bank of America
• Merrill Lynch
• State Street
• Bank of New York

Every single one of these institutions is either related or has interests and connections to the original Fed forming cartel of 1910, ultimately run by the Rothschilds family. These financial institutions have all been saved as a priority by their cartel buddies within the Fed brotherhood. How many Mainstreet banks (that’s ordinary non-Investment Banks) have been saved or helped by the Fed? I would suggest that the Fed brotherhood’s Wall Street tentacles and influence spreads long, dirty and deep into the very heart of the US political infrastructure - which is the only possible explanation that could adequately explain their inexplicable untouchableness and apparent freedom of agenda.

Now some other facts about the the Fed:

• The Fed, as a private US institution, pays no corporate or any other income tax at all to the US government.
• The Fed is allowed to look after US prices and the money supply - “at their own discretion”.
• The Fed charges interest to the US government for every single Federal Note it produces. This charge, in the form of seignorage, is then passed on to the US citizens as an invisible “inflation tax”.
• The Fed has NEVER been properly audited.
• At their top-level meetings, the Fed keeps no written records or memoranda.
• The Fed, as a private institution, is headed by an American banking cartel which, in turn, is under the complete influence of the European-based Rothschild banking family.

As a result of The Fed’s unstoppable financial activity and due to all the rash debt they have caused within America so consistently over the years, 22 cents in every single US dollar is now foreign owned through all their self-serving and mutifarious debt instruments. If these debt instruments were being used properly, then surely the US National Debt would be coming down wouldn’t it ?  But instead, it becomes painfully evident that the Fed uses these foreign loans, multiplied hugely by the practice of “Fractional Reserve Lending” to further create  credit, leading to unstable and untenable mountains of corporate, personal and financial debt. The US Fiscal Debt is currently running at about $60 trillion now, which is 6 X the reported National Debt and about 15 X GDP. These comparisons become even more ridiculous when compared against the dollar notes in circulation - which is approximately $600 billion. The Fiscal Debt is therefore 100 X more than the dollar notes in circulation !! Is this the measure of a strong economy ? Remember that  the total production of the world economy amounts to $60 trillion alone. David Walker, ex-Comptroller General of the government GAO has said that in order to pay back this US Fiscal Debt, every citizen in America would have to pay its government $480,000 just to break even.

In these current hard economic times, it seems that the forefathers of the  American Constitution had some real vision. In 1826, the second bank’s charter was soon to expire and presidential candidate Andrew Jackson - an avid and honest constitutionalist - campaigned fiercely against a central bank which was owned and operated by the international banking element. Here is Jackson’s opinion of those bankers:

“You are a den of vipers. I intend to wipe you out, and by the Eternal God I will rout you out…If people only understood the rank injustice of the money and banking system, there would be a revolution by morning.”

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References:

The Federal Reserve History and Conspiracy

The Federal Reserve: History of Lies, Thievery, and Deceit

David Walker Interview on CBS(Youtube)

Here is a fairly simple description of how - by the wondrous banking mechanism known as “Fractional Reserve Lending” - $700 Billion(The Paulson Plan) turns into $70 Trillion by a simple wave of the Fed’s magic wand.

Fractional Reserve Lending(FRL) is used by all banks these days - but usually with strict discretion. This is how banks make so much money. However, The US Treasury and particularly The Fed and its printing presses continually over-uses this banking mechanism to the extreme. The Fed can do this because they keep the interest rates low artificially. It’s quite simple and works like this - Say China wants to buy $1 million of US debt in the form of Bonds, T-Bills etc. So the Treasury issues the T-Bills via the Fed. The Fed gets the Chinese payment and is then allowed by US banking law - and the mechanism of fractional reserve lending -  to generate 9 X $1 million out of thin air via the use of their over-worked printing presses. The money generated from the T-Bills and T-Notes is supposed to be used to pay back the massive US Fiscal Debt. Nope, doesn’t happen. Instead the now $10 million is lent out at artificially low rates to all the US banks and financial institutions - and when these banks get their share, they can also multiply it a further ten times using the same FRL mechanism - for personal and business loans to the public at much higher lending rates.

So now let’s now talk about the $700 billion Bail-Out. The minute The Fed gets that $700 Billion, it then - with staunch help from their printing presses and their magic wand (FRL) - gets multiplied by 10 and becomes $7 Trillion. Ah, but then when the Fed gives out this money as a low interest “loan”, the receiving financial institutions can also multiply this by 10 again using FRL - so the final Bail-Out will suddenly become $70 Trillion dollars. Hey Presto !! Easy credit isn’t dead is it ?

To give you an idea of how big the $70 Trillion is - The current unmanageable US fiscal debt is only about $60 Trillion now.

Oh…and The Fed charges the government about 2.2 cents on the dollar to produce these greenbacks - so The Fed makes a clear profit (since The Fed itself pays not one cent in govt  tax) off the government and therefore the taxpayer of about $13.9 Billion dollars for creating all these federal notes off the taxpayers own money !! It’s almost laughable isn’t it ? Almost.

And so what will the effect be through the inevitable inflation on the ordinary Mainstreet citizen when the US markets and economy is suddenly flooded with $70 trillion ? Yet another huge “inflation tax” on its people ? And Wall Street is saved ?

It’s a Mainstreet massacre.

I quit.

Today, in their usual manner, the Fed gave away $630 billion to the markets. Without permission, they just did it. They are unstoppable aren’t they? And look what effect this has had, world markets have plunged and hit new lows. The single American Bank Wachovia has assets of nearly $700 billion. So is the US government going to save just that bank with its loose change of taxpayers money ? It certainly couldn’t afford to save anyone else. Truly laughable. This is a wonderful example of The Fed “pissing against the hurricane”. Again.

From the PFXGlobal Site:

“I am usually anti-conspiracy. Not because I think policy makers are morally above it, rather I think it is because they are intellectually below it. However, you have to agree that this particular issue was definitely under-reported today. While everyone watched the Democrats and Republicans in a slap fight, the Fed slipped several hundred billion USD (or at least made it available) into the market. What do you think; was the drama on Capitol Hill a red herring? Either way, I still say there is a ton of opportunity for traders.

If you think the Fed/Treasury team was stymied in their efforts to flood the market with $700 billion today you would be mistaken. The fed increased swaps with just about every central bank out there to $620 billion from $300 billion and increased lending limits to $75 billion for 84 day loans.

A swap with another central bank is essentially a currency pair trade. The Federal Reserve in the US is acquiring foreign exchange reserves through the swap by selling USD to other central banks. Obviously the Fed does not usually enter into transactions like this and does not keep the same size of an FX reserve like most other central banks do. This shift in behavior is supposed to help the other central banks distribute more USD to their domestic banks to prevent global liquidity problems.

What that means is that the Fed is injecting a lot of cash (specifically USD) into the market to try and ease liquidity pressures. In order to keep rates this low, commercial and private lenders have to be willing to loan at low rates. Increasing the supply of the USD should (in theory) decrease its cost and therefore increase credit flow. Unfortunately, based on today’s movement towards a stronger USD and JPY, the plan does not seem to be very effective yet. This is not a big surprise. Fundamentally changing the risk environment in the market is no easy task and that is what the Fed/Treasury team is trying to do. The capital markets are massive and composed of millions of individual participants. Forcing them all to accept your view that risk is overstated right now is not going to be easy.

This has implications for the deal that is floundering in the US House of Representatives. If this injection was not enough will another $700 billion help? What about another $700B after that? Are they merely digging the proverbial hole deeper? In light of current market behavior I think the USD and JPY still look like strong buys whether congress passes a bailout or not.”

“Save Wall Street !! Save us !!….Only then can other countries survive this crisis !!” - Henry Paulson

So, predictably, the Wall St bail-out package from Paulson has now trebled to $700 billion (read tax payers money). And today, the US government has allowed two Wall Street majors - Goldman Sachs and Morgan Stanley -  to switch their status to become bank holding companies. The move - all part of the Wall Street panic restructuring campaign, will also give them access to US Federal Reserve Support (read US tax payers money). The package, initiated by the current high guru of the Treasury - Henry Paulson - will set up a fund to buy back much of the bad debt held by US financial institutions.

As well, Mr Paulson has been pleading with the international community, urging them to initiate and adopt similar policies. “Save Wall Street !! Save us !!….Only then can other countries survive this crisis !!”. This is what Paulson is effectively saying. Meanwhile, certain countries in the Middle East, China and Russia must be watching all this US economic turmoil, and rubbing their hands with glee. There goes the respect…

From the presidential candidates, McCain was apparently truly “enraged” with the greed of Wall St and also conveniently blamed Bush Jnr and Congress (but was careful not to blame The Senate). He also said the rescue plan should be funded by cutting government waste rather than through taxation. Not sure what he means by this somewhat fuzzy solution. By “government waste” does he mean Ben Bernanke and The Fed ? Somehow I doubt it, since McCain always seems to blame others and has about as much depth of economic thought as a puddle in the desert.

Even worse, Obama’s suggested solution to the crisis would be to hire Henry Paulson to work within his new government. Perhaps Obama should also upgrade Ben Bernanke to a position - let’s see - maybe Comptroller General within the  Government Accountability Office ? Perhaps then, Mr Bernanke - with some real responsibility  and accountability for once - might actually learn something about accountancy as well as proper fiscal economics ? My own carefully considered view is that perhaps Mr Bernanke should  indeed move on and, as a brilliant Economics PhD graduate from MIT, I believe he really has learnt all there is to know about the use of the printing press, don’t you ?

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