‘Fed’ Up?

Geoff Metcalf

"Banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.” – Thomas Jefferson

The Federal Reserve is not federal and it is not a reserve. It is a coalition of independent banks and is not subordinate to the U.S. Federal government. That is an annoying, axiomatic fact. It may not be “right,” fair, or even reasonable, but hey, that is the way it was specifically crafted at JekyllIsland in 1913. It should be no big surprise to anyone who understands what the Fed is and isn't that their Board rejected a request by U.S. Treasury Secretary Timothy Geithner for a public review of the central bank’s structure and governance. Come on…“Badges? Badges? We don't need no stinking badges...”
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The Obama administration (in typical imperial over reach) proposed on June 17th a financial- regulatory overhaul including a “comprehensive review” of the Fed’s “ability to accomplish its existing and proposed functions” and the role of its regional banks. The neophyte would-be mandarins still haven't got the memo that it isn’t so just because they say so.

The Fed was reportedly supposed to lead the study and enlist the Treasury and “a wide range of external experts.” They might have been begrudgingly prepared to participate in a comfortable fiction until the epiphany that these Obama folks were really as presumptive as suggested slammed the brakes.

Apparently, after initially agreeing to the review, Fed poobahs saw a potential threat to Fed independence after the Treasury released the proposal. The Obama plan said the Treasury would consider recommendations from the review and “propose any changes to the Fed’s governance and structure.”

I have interviewed Eustace Mullins a few times over the years and he notes, “The Federal Reserve System is not Federal; it has no reserves; and it is not a system at all, but rather, a criminal syndicate. From November, 1910, when the conspirators met on Jekyll Island, Georgia, to the present time, the machinations of the Federal Reserve bankers have been shrouded in secrecy. Today, that secrecy has cost the American people a three trillion dollar debt (Note: currently over $11 trillion) , with annual interest payments to these bankers amounting to some three hundred billion dollars per year, sums which stagger the imagination, and which in themselves are ultimately unpayable.”

Rep. Ron Paul and others have periodically banged their heads against the wall. The soothing letter written by Donald J. Winn, Assistant to the Board of Governors in response to an inquiry by Congressman, Norman D. Shumway, on March 10, 1983. Mr. Winn states that "The Federal Reserve System was established by an act of Congress in 1913 and is not a ‘private corporation’." On the next page, Mr. Winn continues, "The stock of the Federal Reserve Banks is held entirely by commercial banks that are members of the Federal Reserve System." He offers no explanation as to why the government has never owned a single share of stock in any Federal Reserve Bank, or why the Federal Reserve System is not a "private corporation" when all of its stock is owned by "private corporations."

Congress called for a review/audit of the Fed, concerned Fed Chairman Ben S. Bernanke overstepped his authority as he bailed out creditors of Bear Stearns Cos. and American International Group Inc. while battling a crisis that resulted in $1.62 trillion in write downs and epic losses at financial firms.

Treasury hasn’t officially round filed the Treasury requested report (yet), however, no work has been done on the project, which was due October 1st.

Both houses are going through the motions of allowing for audits by the Government Accountability Office of the central bank’s monetary policy and other operations. Not surprisingly, Bernanke opposes a measure, which was introduced in the House by Rep. Ron Paul of Texas. Keep trying Ron…

Congressional leaders are understandably hinky about the notion of giving the Fed more power and are “leaning” toward vesting authority over capital, liquidity and risk-management practices of big banks in a council of regulators.

“Allowing local bankers to play a leading role in selecting reserve bank presidents is the most worrying aspect of the current system,” Lou Crandall, chief economist at Wrightson ICAP LLC, wrote to clients in July.

“The conflicts of interest inherent in the current system are glaring,” Crandall said. Ya think???
Once upon a time, Baron Nathan Mayer Rothschild, "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."

FamilySecurity Matters.org Contributing Editor Geoff Metcalf, a former Green Beret and retired Army officer, is a nationally syndicated author and major market radio show host. E-mail Geoff at geoff@geoffmetcalf.com.