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> From: LCranston [mailto:mulligan@xxxxxxxx]
> Subject: Re: Deflation Myth
>
>
> To All:
>
> Putting aside economics, supply/demand and all of the masinations
> regarding this subject there is one element of this equattion that seems
> to have been overlooked here.
>
Lamont, this is some pretty heavy information you've given us here! I've
inserted a few comments that will hopefully put your mind a little at ease.
> In 1756 Baron Rothchild said "If I can control a countries money I can
> control the country." J. P. Morgan made the same claim in 1907 and we
> had our first mini-depression. It wasn't the first, but one of the
> biggest salvos that the big bankers sent to this nation stating that this
> country needed a central bank in order to stabalize the currency and the
> economy. Six years later we got the Federal Reserve Bank (not a federal
> organization), but a privately held banking corporation. Ownership is
> 52% Rothchild (London-Bank of England), 8% Amsterdam & Hamburg Warburg
> (Germany), 8% Rothchild (France), 8% Moses Isreal Sief (Italy), 8%
> Goldman Sachs (U.S.), 6% Lehman Brothers (U.S.), 6% Rockfeller (U.S.), 6%
> Kuehn Loeb (U.S.).
>
Although this may be historically true, it really doesn't matter to today's
investor. The simple fact is the Chairman of the Federal Reserve (Alan
Greenspan) is nominated by the president, and approved by the congress. The
#1 priority of all politicians is to get re-elected. If Greenspan were
acting in a way that was good for bankers but bad for the American people,
he would be removed from his job- not out of principle, but out of
political survival. The goal for the Federal Reserve is to act in a way
that is good for both the general population AND the banks.
> Prior to the establishment of the FR the money in our pockets were
> Treasury Notes and there was no interest attached to the note. Since
> 1913 we now have Federal Reserve Notes which have interest attached to
> them for which each individual pays to the FR. That is the way we got
> our 30 years bond for which you and I pay interest (the national debt).
> For example if the government needs to borrow one million dollars they
> ask the FR for the money. The FR in turn asks the government for one
> million dollars in bonds (interest bearing of course). To the FR it's
> only an entry in a ledger, no money was really created just the ledger
> entry. Something for nothing. The U.S. government now has to repay that
> $1 million dollars plus the interest back to the FR. Now just who do you
> think gets that interest?
This simply isn't true. Every penny of the $5.5 trillion debt of the US
government was issued by the US Treasury Department (The Bureau of the
Public Debt, to be specific), thus the names TREASURY Bond, TREASURY Note,
and TREASURY bill. The Treasury Department and the Federal Reserve are two
entirely different entities. Although the actual sale of this debt is done
through Federal Reserve Bank Servicing Offices, the Fed is neither the
issuer nor the buyer of the debt. This debt is/was issued to cover the
annual US budget deficit of the US federal government, which is simply the
difference between what the government spends and what it receives in the
form of tax receipts.
Approximately $260 billion out of the $1.75 trillion the federal government
takes in every year from taxes is used to service (make interest payments
on) the national debt. The answer to your question is very simple- the
interest is receive by / paid to the holders of the bonds. Approximately
75% of the outstanding US debt is held by private American investment
entities, such as pension funds, insurance companies, bond funds, and
wealthy individual citizens. The remaining 25% is held by foreign
governments and investment groups.
>
> In 1913 this country was in debt to the tune of only $80 million. Since
> the FR has so graciously taken on the task of stabalizing our currency,
> the economy as well as supporting other countries money with our dollars,
> I guess we should all feel grateful. Then why do I feel that my pocket
> has been picked?
>
As far as your last statement pertains to the national debt, we're in total
agreement. The debt is paid off by taxpayers like you and me, which
wouldn't be so bad if the money had been spent wisely, but it wasn't.
> If you want to know more about this rape of our monetary system you might
> like to read; Secrets of the Federal Reserve by Eustice Mullins. It
> gives a very thorough and detailed explanation of the events leading up
> to and the establishment of the Federal Reserve.
>
Sounds like an interesting book, but keep one thing in mind. The goal of
any author is to sell books, whether that coincides with the truth or not.
The simple fact is, controversy sells. That's not their fault, it's ours.
I honestly think most of banking history is somewhat boring. Therefore,
authors have to put a "conspiratorial spin" on the subject to make it sell.
Just something to consider.
Bruce
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