THE Federal Reserve Thread pt 1 (merged)

[OilsNotWell]

I like the part in the movie 'Total Recall' (except the fact that AS, son of Nazi SS father, and himself a Nazi and Hitler sympathizer (of course, THAT he wishes to remain hidden...but there is some strong corroboration), former extremely close friend of Kurt Waldheim (remember him?), sexual harasser, and Bilderberg chosen one is in it (strong statements I know, but look it up, I've followed his career for decades)...By the way, duid you know he likely still holds dual Austrian and American citizenship? And some want him to be president? ]....ook, back to the movie....where the mutant in the belly says: "OPEN YOUR MIND!.....OOPPEENNN YOUR MIIIIIIND!!"

"The regional Federal Reserve banks are not government agencies... but are independent privately owned and locally controlled corporations."
—Lewis vs. United States, 680 F.2d 1239 (9th Circuit, 1982)

Funny how no one seems to know what should be well-known, huh?

[Ayoob_Reloaded]

Buy gold and silver every now and then, and get your hands on some arable land with a good water source.

[skiwi]

The Federal Reserve IS a private for profit central bank. This topic came up a few days ago

Fed is privately owned?

There's also a 967mb 3 VCD-ripped avi torrent version of Money Masters being seeded at http://conspiracycentral.net:6969/index.html

and yeah most people need to be enlightened about a lot more than just peak oil

[Tapas]

Imagine this:

You have a small community of 20 men, women and children living in harmony with nature in an isolated island. The adult males are spending their time farming, growing rice and corn, raising livestock, building huts and fishing in the rivers. The women are busy raising their children, cooking, weaving clothes, harvesting the crops while the children are helping the adults in growing, gathering, and building all the essential elements to community life and learning the secrets of survival.

In this primitive culture there is no concept of money. Barter is the method of exchanging goods and services. People are trading bushels of wheat for buckets of freshly caught fish. Women are trading bamboo furniture for hand woven quilts designed by others. It is a closed community based on mutual cooperation and sharing. Every individual is contributing their manual labor to enjoy a fair share of the sum total. Nobody is getting a free ride.

70 years goes by. The population doubles. There are now 40 men, women and children living in this island. Resources are plentiful. The barter system is serving them well. Individuals are still exchanging their goods and getting to enjoy a share of the total.

Then comes an individual with a very clever idea. He introduces the concept of money. He declares what a wonderful idea it would be if instead of trading 1 bag of wheat for 2 fishes, they decide to put a monetary value to all their goods. Just look at the convenience. If you price the bag of wheat for a dollar and the two fishes for a dollar, then it would be considered fair trade to get a bag of wheat if you had a dollar to pay for it, even though you may not have 2 fishes at the very moment.

Similarly, another person is free to get two fishes if he had a dollar in his possession, even though he may not have a bag of wheat to trade upfront.

It all seems like a brilliant idea does it not?

One little problem. Where will these initial dollars come from? The inventor of this plan proclaims he will print all the dollars, as much as necessary, and lend them out at a very low interest of 2%. Any individual is free to borrow as many dollars he wants so long he pays back the principle plus 2%.

The gullible members could not see the outright fraud hidden behind this simple plan. They agree to it. It serves their short term greed. They quickly discover how easy it is to get a bag of wheat just by borrowing a dollar without first having to take the trouble of catching two fishes. This dollar needs to be returned after one year with an additional 2 cents. Big deal they think. After all, they are planning for a large family. They would have additional helping hands to increase the family wealth.

An astute reader will at once note the sinister plan that lies hidden behind this concept.

1. The clever individual who thought of this scheme does not need to do any manual labor at all! He gets to live off the labor of others. He lives off the 2% interest for every dollar that people borrow from him. All he has to do is print these dollars.

2. The population of the community redoubles to 80. The total working potential of the community has increased by a factor of 2. Twice the number of working individuals are now borrowing dollars. As the borrowing amount increases, so does the total debt owed to the clever banker. The larger the population, the richer he gets!

3. All the banker is really doing is keeping log of the energy transfer within this growing community. He is not creating any energy himself. He is simply tracking the flow of energy through an intermediate medium called a dollar. The transfer of energy is real. The dollar is fake. The dollar is merely tracking how the energy is being shared, and used. For each unit of energy being transferred, he is getting a cut.

4. The true source of all energy is the sun. The earth is getting a free share each and every year from the sun. Nobody is paying a penny to the sun to enjoy this energy. It is truly a free gift. Every living creature is entitled to this free gift.

5. The plants are converting this solar energy into food by a process known as photosynthesis. The farmers in the community are harvesting the fields. The livestock are feeding on the plants. The people are raising the chickens, goats and cattle for their meat.
The sunlight is keeping the planktons alive in the oceans. The fishes are surviving eating the planktons. Humans are consuming fishes to feed themselves.

6. Notice, all of these basic life processes are happening without the input of a single fake dollar. Our monetary system is nothing but a superficial fake construct. However, the benefits of the free source of energy - the sun, is being radically skewed by the introduction of money. People with more dollars, get to enjoy more than their fair share of energy.

7. Notice another important thing. Fossil fuels are nothing but stored solar energy - a product of ancient photosynthesis. Individuals who are controlling the oil are getting instant access to a treasure trove of stored energy.

8. As the human population grew from 1 billion to 6.5 billion, not only did the potential for manual work increase 6.5 times, it actually increased by a factor of several hundred once you factor in the energy released from burning about 1 Trillion barrels of oil, coal and natural gas.

9. All this energy transfer has been tracked by a man-made entity called money. The more people expend energy, the more fiat dollars that need to be printed, and higher the debt load of the population that is owed to the central bankers.

10. Money, which should have been used as a convenience and issued by the government, now becomes a sinister tool to enslave the population making them life long debt slaves to the central bankers.

11. In the final end-game, the central bankers takes over every nation and controls the entire wealth of the planet.

12. The game is rigged from start. The concept of usury - I give you a dollar, you give me a dollar plus something is outright fraud and flies against all natural laws. You cannot get more than you give.

13. Ultimately this flawed system has to collapse. This Ponzi scheme is dependent on perpetual growth. The point at where our energy peaks - meaning no more growth, will also mark the beginning of the collapse of our monetary system.

[jaws]

Imagine this:

You have a small community of two men living in harmony with nature in an isolated island. One of them produces coconuts and tools made from seashells. The other one produces fish and tools made from seashells. Since both of them need all three goods to survive, they trade regularly amongst each other. But since they both produce seashells, they begin to 'save' seashells they collect in order to use them for trade later (as seashells don't go bad like fruit or fish). Soon they are doing all their trading in seashells and quote each other fish and coconut prices in seashells.

One day the first man is having an existential crisis. He decides not to work for one day and instead buys fish alone to eat that day. However his savings are too low to pay for all the fish he needs. The second man makes him a deal. "I'll give you thirty seashells of fish for today, but tommorow you must pay me back forty seashells." Still feeling depressed from his existential crisis, the first man agrees.

The next day he goes to work collecting seashells and coconuts, but he can't possibly find 40 quality seashells in one day. He does however collect his usual harvest of coconuts. The two men meet again for trade.

"I'm sorry, I couldn't find enough seashells to repay you friend," says the first man.

"No problem, I will simply take the value of the repayment in coconuts, we will not trade in seashells today," says the second man.

The second man is compensated for his restraint in consumption the previous day by having a much bigger share of the day's output today. The debt is cleared and the economy never had to grow or disrupt the harmony with nature.



Debt to some is savings to other. Interest is price you pay to bring wealth forward through time, to enjoy wealth today at the expense of your future wealth. The opposite is true for the lender. Interest is the price you earn for foregoing wealth today to increase your wealth in the future.

Interest, money and credit can and will exist in any economy.

[nznutter]

Peak oil will rid the world of debt.

Fiat currencys cant survive a collapsing economy.

We will have either a deflationary collapse or a hyperinflationary collapse.

Either rids us of debt either by default in the case of defaltion or by the monetising of debt in the case of hyperinflation.

[UIUCstudent01]

I couldn't but help notice that 2 producers were in Jaws story - there wasn't a person just creating money and lending more of it out than it was possible to repay. And the debt was created and limited by time and resources in the second story.

I think that is the crux of the whole "rebel against the central bankers" thing... and the fact that the bankers get a free ride for doing little to nothing or something. (Everyone dislikes the freeloader.)

Of course, I don't see how money can be abolished. With money, the practice of 'usury' will always be present in one way or another.

-------What follows is my free-flow thoughts---It may be completely wrong, whatever ----------------

Basically, though, it shows that money can be manipulated in such a way that you can basically freeload if you lend people money with interest. If you have enough money that is... Basically, it's a business without producing anything. It's a kind of an advanced form of feudalism where one isn't tied down to land... but currency...

And that's basically a form of control and power. What was power back in feudalism-days? The amount of land and people you had under that land.

But as a middle-class evolved - traders and craftsmen - people could earn a living by not being tied down to land and were 'free' (in those days).

Maybe, the banking is just an evolved form of power? Tieing down the middle-class under control of those in power?

[ubercynicmeister]

Hi Tapas. You're right...."banking" and "money" are the two biggest scams on the planet.

"Money", as others have noted here at Peak Oil.com, is actuaslly one of the most truly efficient ways of separating one'sself from one's responsibilities.

if I pay you to go out & kill someone, therefore I am (somehow) "not guilty" because I did not actually pull the trigger. It took the courts a long time to convince those WITH lotsa money that paying someone else to shoot someone was not a way of escaping the law, but the prinbciple satnds.

If I "pay" for some product, even though that product may be innocuous in and of itslef, I and therefore somehow "free of responsibility" for the making of that product, say in a sweat-shop in SE Asia (or other places in the Third World).

This is why the "love of money" is actually the "love of evading or eliminating personal resposibility".

Once the payment has been transacted, one need not have any more to do with the person from whom one has bought the product, and the vendor need not have anything more to do with you. As anyone who has ever purchased faulty goods can tell you.

This is why, even MORE than the Oil-Guzzling Motor vehicle, the love of money has introduced such separation between us humans at the very time when we need the opposite most.

What do I mean?

Well, consider who will be reading the peak oil .com forum. They may well be from every corner of the world...convenient, one might say, but disparate, in other words, thinking (mostly) alike, but so spread apart, geographically speaking, that we cannot get together, except in the most limited of fashions.

Consider the Oil industry - it has a similar wide-spread nature, BUT it can and does get together, because it has to - the oil exists in certain places, therefore if one wants to get at it, one must go there.

And meet. And try to learn to get along.

It's usually those who have the greatest "love of money" who can be most easily placated by the Oil companies, and usually such people have an unnerving habit of having a vast love of power, too. The Love Of Money may well also be described as "Success Worship". Success worship always leads to power worship, in the long term.

Then comes an individual with a very clever idea. He introduces the concept of money. He declares what a wonderful idea it would be if instead of trading 1 bag of wheat for 2 fishes, they decide to put a monetary value to all their goods. Just look at the convenience. If you price the bag of wheat for a dollar and the two fishes for a dollar, then it would be considered fair trade to get a bag of wheat if you had a dollar to pay for it, even though you may not have 2 fishes at the very moment.

Similarly, another person is free to get two fishes if he had a dollar in his possession, even though he may not have a bag of wheat to trade upfront.

It all seems like a brilliant idea does it not?

It seems like A CONVENIENT idea...it may, or may not, be seen as brilliant to those upon whom the plan is being foisted.

Most people would prefer to deal directly. Besides allowing a person to inspect the goods, before they trade, it give you a chance to have a natter (ie: have a talk with the other person).

Besides being far more fun than actually doing something, it alloows the average Joe to check out whether the "opposite number" is genuine or not.

The REAL pushers behind fiat currency, which is what you're describing, is the governments, who liked the idea of centralised taxation.

8. As the human population grew from 1 billion to 6.5 billion, not only did the potential for manual work increase 6.5 times, it actually increased by a factor of several hundred once you factor in the energy released from burning about 1 Trillion barrels of oil, coal and natural gas.

I'm now convinced that human population rose NOT because of better food or better medicine, but because of the need by poor people to "pay off" their loans - and the only way they could do that was to have more & more kids.

[quote} 13. Ultimately this flawed system has to collapse. This Ponzi scheme is dependent on perpetual growth. The point at where our energy peaks - meaning no more growth, will also mark the beginning of the collapse of our monetary system.[/quote]

Ponzi schemes are known as "Pyramid marketing schemes" here in Australia. Yup, you're right.

The ONLY way it can keep going is to force poor people to supply the only "currency" they can: children.

Expansion now = survival.

pity when it all stops expanding, eh?

[jaws]

I couldn't but help notice that 2 producers were in Jaws story - there wasn't a person just creating money and lending more of it out than it was possible to repay. And the debt was created and limited by time and resources in the second story.

I think that is the crux of the whole "rebel against the central bankers" thing... and the fact that the bankers get a free ride for doing little to nothing or something. (Everyone dislikes the freeloader.)

Of course, I don't see how money can be abolished. With money, the practice of 'usury' will always be present in one way or another.

-------What follows is my free-flow thoughts---It may be completely wrong, whatever ----------------

Basically, though, it shows that money can be manipulated in such a way that you can basically freeload if you lend people money with interest. If you have enough money that is... Basically, it's a business without producing anything. It's a kind of an advanced form of feudalism where one isn't tied down to land... but currency...

And that's basically a form of control and power. What was power back in feudalism-days? The amount of land and people you had under that land.

But as a middle-class evolved - traders and craftsmen - people could earn a living by not being tied down to land and were 'free' (in those days).

Maybe, the banking is just an evolved form of power? Tieing down the middle-class under control of those in power?

1) Lending money with interest isn't freeloading. The money you lend are your savings. You worked for them and saved them (or your parents did for you). The interest you collect compensates you for not enjoying the full extent of your wealth.

2) Central banks aren't freeloading by providing nothing. They provide a very valuable and highly demanded good, money, an asset with extremely high liquidity providing a precise measure of value. People want money and need money to conduct transactions to enjoy the full productivity of their work. You try living using only barter. It's just not practical. Central banks answer that need by creating money.

3) The profits made from money creation are always ultimately SPENT. That means that there is no such thing as "lending more of it out than it was possible to repay." The debtor is always in a position to postpone paying back the principal by trading the products of his work. The profits a central bank earns go back to its owners (usually a national government) and are spent (usually in public services).

[nznutter]

Jaws,

Central Banks dont create most money, private banks do that. Central Banks create M1, i.e. printed money that you use when you pay in hard cash. Most other money M2, M3 etc is created by your private bank i.e. citibank etc via the fractional reserve banking system out of thin air.

The fractional reserve banking system is the biggest fraud ever inflicted on human kind. Money is created out of a tiny reserve of savings on a 10 to 1 ratio and then interest charged on the money created.

Imagine if you gave me $10000 and I used it to create a $100000 loan to some poor smug and then charged him interest and only paid you interest for the $10000 deposit. You would call me a fraudster and that is exactly what bankers are!

Those who control the money supply control the economy. That is to much power to put in a politicians or bankers hands.

I am a hard money advocate i.e. silver and gold are true honest money with no shanagans! They cant just be printed into reality like the current USD!

[Jenab]

I couldn't but help notice that 2 producers were in Jaws story - there wasn't a person just creating money and lending more of it out than it was possible to repay. And the debt was created and limited by time and resources in the second story.

Jaws' story is the fantasy image of the importance of banking, as the bankers would have you believe it. There is another difference: fish are goods acquired by work. The intrinsic good of a fish is worth at least the energy used in catching it. By eating the fish, you get back more calories than you spent in holding the fishing pole for three hours.

Bankers don't lend fish. They lend currency. The value of currency is not intrinsic, it is symbolic. It is not fact, it is fiction. It serves the purpose of currency as long as people agree to behave as if the fiction were fact. Currency represents, symbolically, much more value than you can get by eating it, or by burning it. More to the point, currency represents vastly more value than it cost to manufacture - so much more that it can be said that currency is not a good created by work.

And that's why Jaws' summary of interest is hogwash. Money is a conventional representation of energy. When the bankers create money from nothing and loan it, they are asking everyone to believe that the First Law of Thermodynamics can be and has been suspended for their convenience. Next, they appoint themselves Entropy's tax-collectors by imposing interest on a fictional representation of energy that does not really exist, or of work that never really was done.

If the bankers actually lent fish, those fish would have had to have been caught by someone. The banker would have had to barter for it or do the fishing himself. If he bartered, he'd need something to barter with, and whatever that something was would have had to have been made by someone. Without the use of his money fantasies, the banker would have no escape from doing honest work at some point or other.

If the bankers lent fish, the proportion of energy invested would be commensurate to the value of the loan principal. But because the bankers lend money, rather than fish, the bankers get a free ride. Worse, their parasitical mechanism gains leverage with time, so that they do eventually end up dispossessing everyone else, essentially sucking the Earth from under the feet of mankind.

Evidently, once modern fiat currency, debt-based money systems, and fractional reserve banking appear in the world, one of two things must happen. Either the bankers must die at once, or else the world will die a few generations later.

Jerry Abbott

[shakespear1]

Jenab

Very well put. I think most fishermen could relate to this and thus better understand what their banker is doing. Amazing how the myth persists and how few understand it.

[Jenab]

Jenab

Very well put. I think most fishermen could relate to this and thus better understand what their banker is doing. Amazing how the myth persists and how few understand it.

I think the widespread belief in the banking myth is a media artifact. Most people don't think, they watch TV and nod their heads whenever some commentator gives a non-verbal cue that some head-nodding is called for.

The bankers have, of course, an identifiable financial interest in making people think that banking is indispensible and that bankers do useful work by creating money. Protracted media propaganda can spread a myth around a TV culture so well that fewer than one person in a hundred will see through it, and, of those, only one in a hundred will speak of it.

Sometimes, when it can be "justified" somehow (say, with lies) the promulgators and profiteers of a myth are able to get laws passed that make it illegal to question the myth. I'm not certain whether that's ever been done in regard to banking.

About 100 years ago, here in the USA, one of our state legislatures almost passed a law that would have legally assigned a numerical value to pi, the ratio of a circle's circumference to it's diameter. It was the WRONG numerical value, of course. Something like 4.0. Nobody ever proposed legislation that would have assigned to pi its correct value because the truth doesn't need to be established (or shielded from inquiry) by laws.

Jerry Abbott

[agni]

Evidently, once modern fiat currency, debt-based money systems, and fractional reserve banking appear in the world, one of two things must happen. Either the bankers must die at once, or else the world will die a few generations later.

Fractional reserve banking has been in existence for quite a bit more than a few generations. The fraction that a bank has to keep in reserve is an important component of controlling the supply of money in the economy. The opposite is full reserve banking which nobody uses. Also, fractional-reserve banking came into use long before fiat money came into use.

-A

[Kez]

Money is a conventional representation of energy.

I see money more as a conventional representation of time. I spent x amount of time doing something, and I have x amount of dollars for my time that was spent. I then ask the bank to loan me a big chunk of dollars because I am competent enough, over a long period of time, to pay them back. Energy makes sense also.

If you are suggesting that it would be better to give the 'bank' hogs and coconuts to pay for a house, then the bank would then have a huge supply of everything, and make a nice profit, just like they do now. Whether they are charging you interest on money, or have the best market for everything you need, like hogs and coconuts, they are going to be making money. Unless you can convince some people who actually build houses and sell land to be paid in hogs over 30 years, then you need some kind of a middleman to get any large purchase done. I mean if everyone paid their taxes in various good and commodities, the government would have to turn around and sell all that back. There is a middleman no matter what. No one human being is a certified professional in every profession. Not every community has a brain surgeon or an astronaut who works for free or likes being paid with fish scales.

There are alternatives of course, like the Amish and other societies that are close nit and help each other, but even they have to use money for some situations.

[0mar]

I don't know how but Jews figure into this, as this thread is about bankers and money.

[FatherOfTwo]

oh boy, here we go.

[jaws]

Jaws,

Central Banks dont create most money, private banks do that. Central Banks create M1, i.e. printed money that you use when you pay in hard cash. Most other money M2, M3 etc is created by your private bank i.e. citibank etc via the fractional reserve banking system out of thin air.

The fractional reserve banking system is the biggest fraud ever inflicted on human kind. Money is created out of a tiny reserve of savings on a 10 to 1 ratio and then interest charged on the money created.

Imagine if you gave me $10000 and I used it to create a $100000 loan to some poor smug and then charged him interest and only paid you interest for the $10000 deposit. You would call me a fraudster and that is exactly what bankers are!

Those who control the money supply control the economy. That is to much power to put in a politicians or bankers hands.

I am a hard money advocate i.e. silver and gold are true honest money with no shanagans! They cant just be printed into reality like the current USD!

Contrary to what you've been told in economics 101, banks don't actually create money. They circulate money, pass it on from savers to borrowers. The 'money' you have in your checking account is not actually money, it is a debt the bank owes you. If you issue a check, then the bank has to call back some of its assets (loans made out) to redeem the check to the receiving party. Often this comes out of the bank's cash reserves, from where the concept of 'fractional reserve banking' comes from. Banks keep a fraction of deposits on reserve to meet their expected cash outflows.

The only agencies that can legally create money are the central banks. They can literally write down a number on a piece of paper and send it to private banks to deposit in their accounts. This number will be the banks' claim on actual currency that the central bank may or may not have printed yet. They can use this number to issue more loans. This is how central banks control interest rates. If a bank needs a million 20$ bills, it will draw down its federal reserve account for them. The federal reserve will in turn create a million 20$ bills with its printing facilities.

[jaws]

Bankers don't lend fish. They lend currency. The value of currency is not intrinsic, it is symbolic. It is not fact, it is fiction. It serves the purpose of currency as long as people agree to behave as if the fiction were fact.

That's absolutely false. Currency has a real intrinsic value, it is the easiest method to conduct exchanges. No other good makes it as simple to exchange wealth for goods and services or vice versa. You'll never get people to conduct their daily business in fish, because fish isn't a precise measure of value, depreciates rapidly thus is a poor store of value, and is big and not very valuable thus is a poor medium of exchange.

Currency represents, symbolically, much more value than you can get by eating it, or by burning it. More to the point, currency represents vastly more value than it cost to manufacture - so much more that it can be said that currency is not a good created by work.

A Microsoft Windows compact disc represents much more value than you can get by eating, burning it, or that it takes to manufacture it. Its value is still extremely high and it took an immense amount of work to make it valuable.

[MacG]

1) Lending money with interest isn't freeloading. The money you lend are your savings. You worked for them and saved them (or your parents did for you). The interest you collect compensates you for not enjoying the full extent of your wealth.

Maybe the money I lend are my savings, but that is certainly not the case with banks. They create the money out of thin air. And why should money posess properties which most useful real world items lack? Most of the useful stuff in this world deteriorate over time. How could you expect hoarded money to keep its value? Let alone *increase* due to interest payed? If I borrow a fish from you, how could you expect to get more than an equal fish back? Considering the alternate fate of the fish if you tried to hoard it, you should be happy that I preserved thae value of the fish for you by returning a fish of equal qualities as I borrowed from you.

2) Central banks aren't freeloading by providing nothing. They provide a very valuable and highly demanded good, money, an asset with extremely high liquidity providing a precise measure of value. People want money and need money to conduct transactions to enjoy the full productivity of their work. You try living using only barter. It's just not practical. Central banks answer that need by creating money.

Money is not an asset, money is a *representation* of real assets. And the banks overcharge grossly to provide the medium of exchange. If I "borrow" $200 000 at an average interest of 5% over 30 years to build a house, and amortize the entire loan over those 30 years, then the bank will collect 0.05*30*100000=150000 in interest payments. This without putting one single nail in the house, just providing the medium of exchange. If that is not usury, then what is?

3) The profits made from money creation are always ultimately SPENT. That means that there is no such thing as "lending more of it out than it was possible to repay." The debtor is always in a position to postpone paying back the principal by trading the products of his work. The profits a central bank earns go back to its owners (usually a national government) and are spent (usually in public services).

Central banks dont make the big money, that is for the ordinary banks. And their profits are not ultimately spent, they can be hoarded also. The fact remain that only the principal is created when a "loan" is granted, the interest must come from your own or someone elses principal.