The Mysterious Madness of the USA's Money System
By Robert Gover
A monetary system is not about your money or my money, it's about our
money, the stuff we use to buy and sell and keep track of who owes whom how
much. Today, everybody needs money to live. If everybody has enough money to buy necessities, nobody starves or goes homeless and the whole society
Money became everybody's business with the industrial revolution and
massive population shift from farms to cities. Before this migration, most people, other than the aristocracy, grew their own food, made their own clothes, built their own homes, bartered, and had little need for money. Now money extends its tentacles into every facet of our lives, from conception to casket.
When gold and silver and other precious metals were used as money, money was a form of wealth itself. But modern paper currencies are based on our faith in them as means of exchange, measure of value, and symbol of wealth. Modern money is not wealth itself, but just as the flag is often equated with the patriotism it symbolizes, money is often equated with the real wealth it symbolizes.
Since money is now as necessary to our lives as air and water, it's amazing
that most of us know more about air and water than we know about money. In this and other ways, money is comparable to the great mystery we call God, the mystery from which we came into this life and into which we disappear when we die.
Control of money bestows God-like powers. "Give me control of a nation's money and I care not who makes the laws," said Mayer Amschel Rothschild a couple hundred years ago as he was pioneering what we now call "the new world order."
Lending and borrowing money is as old as money itself. What's new is public debt: Government borrowing from bankers to be repaid by an unwitting third party called "we the people." Public debt is not to be confused with private debt, all those corporate, mortgage and credit card loans. Murray Rothbard (1) explains public debt this way:
"The public debt transaction...is very different from private debt...the
government receives money from creditors, both parties realizing that the
money will be paid back not out of the pockets or the hides of the politicians and
bureaucrats (who borrowed it), but out of the looted wallets and purses of the hapless taxpayers, the subjects of the state. The government gets the money by tax-coercion; and the public creditors, far from being innocents, know full well that their proceeds will come out of that selfsame coercion. In short, public creditors are willing to hand over money to the government now in order to receive a share of tax loot in the future. This is the opposite of a free market, or a genuinely voluntary transaction. Both parties are immorally contracting to participate in the violation of the property rights of citizens in the future. Both parties, therefore, are making agreements about other people's property, and both deserve the back of our hand."
This money borrowed by government is then sliced and diced and sold as Treasury Bonds and Bills. It cannot be completely repaid without leaving the American population money-less. All our money—currency and credit—has been borrowed from the banks of the Federal Reserve, the USA's privatized central bank. If everyone were to suddenly repay all debts in full, we'd be without the means-of-exchange money we need to function as a society. That's at once utterly illogical and literary true.
About 99 percent of the American population believes government creates our money. Not so. More than 97% of what we call money is actually credit, loaned by the bankers of the Federal Reserve. In other words, the bankers of the Fed sell us the stuff we use as money. Money is created when loans are made. So most of what we call money is actually debts to borrowers and credits to lenders. These electronic transfers become paper bills and coin money if or when people cash checks rather than deposit them.
Most people believe the Federal Reserve is an agency of the US Government. Why else would it be called "Federal"?
A US senator and a few powerful bankers conceived what was to become the Federal Reserve System in secret during November 1910, at a retreat on Jekyll Island, Georgia. "Their expressed purpose was to standardize the nation's banking system. But they also intended to eliminate competition between banks and maximize profits by creating a central bank independent of government control. To do this, they would need to write the needed legislation and carefully navigate it though Congress in such a way as to not arouse fears by allowing the public to realize they were privatizing control of the nation's money. If they could manage this they might expand and achieve their long-range goal: A cartel of independent central banks that would dominate the world." (2)
Even today some historians deny that this conspiratorial meeting ever happened. But the cat got out of the bag in 1916 when B. C. Forbes, who would later found Forbes Magazine, was a reporter for Leslie's Weekly, and wrote:
"Picture a party of the nation's greatest bankers stealing out of New York on a private railroad car under cover of darkness, stealthily hieing hundreds of miles South, embarking on a mysterious launch, sneaking on to an island deserted by all but a few servants, living there a full week under such rigid secrecy that the names of not one of them was once mentioned lest the servants learn the identity and disclose to the world the strangest, most secret expedition in the history of American finance…I am not romancing. I am giving to the world, for the first time, the real story of how the famous Aldrich currency report, the foundation of our new currency system, was written."
And in 1930 banker Paul Warburg wrote a book of 1,750 pages in which he described the meeting and its purpose without mentioning its location or the names of those who attended—except for Senator Aldrich. "I do not feel free to give a description of this most interesting conference concerning which Senator Aldrich pledged all participants to secrecy," wrote Warburg. "Even the fact that there had been a meeting was not permitted to become public."
Ten years after signing off on the Federal Reserve Act, President Woodrow Wilson said: "I am a most unhappy man. I have unwittingly ruined my country. A great industrial Nation is controlled by a system of credit. Our system of credit is concentrated. The growth of the Nation, therefore, and all its activities are in the hands of a few men. We have come to be the worse ruled, one of the most completely controlled and dominated Governments in the world—no longer a Government of free opinion, no longer a Government by conviction and vote by the majority, but government by the opinion and duress of a small group of dominant men."
In the 1920s, Congress asked one Fed member (Donald J. Winn, Assistant to the Board of Governors) if the Fed wasn't in fact a private corporation. Winn replied, "The Federal Reserve System was established by an act of Congress and is not a private corporation." He went on to explain: "The stock of the Federal Reserve Banks is held entirely by commercial banks that are members of the Federal Reserve System."
Say what? How can it NOT be privately held when in fact its stock is privately held by bankers? If some homeless guy said he didn't rob that convenience store, he merely refreshed its cash register, he'd be declared criminal clown of the year.
Poet Ezra Pound got himself in a world of trouble by vociferously objecting to this heist we now affectionately call The Fed. He felt the need to flee the USA and go to Italy where he broadcast diatribes against those who had created it. The US Government finally locked him up in an insane asylum. While there, Pound was visited by a young poet, Eustace Mullins. In Mullins' forward to his book, Secrets of the Federal Reserve, he wrote:
"In 1949, while I was visiting Ezra Pound who was a political prisoner at St. Elizabeth's Hospital, Washington, D.C., Dr. Pound asked me if I had ever heard of the Federal Reserve System. I replied that I had not, as of the age of 25. He then showed me a ten dollar bill marked 'Federal Reserve Note' and asked me if I would do some research at the Library of Congress on the Federal Reserve System which had issued this bill. Pound was unable to go to the Library himself, as he was being held without trial as a political prisoner by the United States government. After he was denied broadcasting time in the U.S., Dr. Pound (had) broadcast from Italy in an effort to persuade people of the United States not to enter World War II. Franklin D. Roosevelt had personally ordered Pound's indictment, spurred by the demands of his three personal assistants...I had no interest in money or banking as a subject, because I was working on a novel. Pound offered to supplement my income by ten dollars a week for a few weeks. My initial research revealed evidence of an international banking group which had secretly planned the writing of the Federal Reserve Act and Congress' enactment of the plan into law. These findings confirmed what Pound had long suspected. He said, 'You must work on it as a detective story.'"
When Ezra Pound ran out of money and could no longer pay young Mullins $10 a week for his research, Mullins appealed to various foundations for money to complete his task. All refused. He then wrote a book based on what he'd found so far, but 19 New York publishers rejected his manuscript. One editor, Devin Gerrity, president of Devin Adair Publishing Company, gave him some friendly advice: "I like your book but we can't print it. Neither can anybody else in New York. Why don't you bring in a prospectus for your novel, and I think we can give you an advance. You may as well forget about getting the Federal Reserve book published."
Mullins eventually did publish a small edition in 1952 via two of Ezra Pound's disciples, under the simple title Federal Reserve. A couple of years later an unauthorized edition was done by a New Jersey publisher under the tile The Federal Reserve Conspiracy. In 1955, a German edition was put out by Guido Roeder but the entire edition of 10,000 copies were burned by "government agents," ordered to take this action by the US High Commissioner to Germany James B. Conant, who was President of Harvard University from 1933 to 1953. This was the only book burning in Germany since the days of the Nazi Party. In 1968 another pirated edition appeared in California and Mullins tried to get the FBI and Postal Inspectors to act, but they refused. Then, in 1980, a second German edition came out and because the US Government no longer controlled the internal affairs of Germany, this edition survives. It's a duplicate of the one that was burned in 1955.
Who owns the debt being repaid by American taxpayers for money borrowed from the Fed banks by the US Government? In 1952, Mullins says, he traced those people to a group called the London Connection. The conclusion was obvious. Although the USA gained its political independence during the Revolutionary War, we were resold into debt to British aristocrats by the creation of the Fed.
Today the general belief is that our money is printed by government…although simultaneously we are harangued about "the national debt" and how each of us owes an astounding share of it, and what a crime it is to pass this horrendous debt onto our children and grandchildren. This cognitive dissonance is evidence that secrecy persists. Even President John F. Kennedy got whacked shortly after he made a move to undermine the Fed's absolute money power. (Google Executive Order 11110. June 4, 1963 for details) Remember that famous line, "Follow the money," in Oliver Stone's movie JFK?
This evening when you watch the TV news and see that handsome face under the perfectly coifed hairdo blathering on about "the national debt," know that this purveyor of information is grossly misinformed, and that if he were not misinformed, you would not be seeing him on TV.
One final irony: the Peoples Republic of China adopted the monetary system advocated by Ben Franklin and Abe Lincoln. Their People's Bank of China is an agency of their government. American and European financiers have lanbasted the Chinese system as "state control" in contrast to "free enterprise." Well, our system is free profits for a tiny minority—those who economist Thorstein Veblen called a parasitic leisure class—but a huge debt burden for the vast majority.
- "Repudiating the National Debt" by Murray Rothbard (1926–1995), posted on the von Mises web site January 16, 2004. Rothbard was professor of economics at the University of Nevada, Las Vegas, and vice-president for academic affairs at the Ludwig von Mises Institute. This article ran in the June 1992 issue of Chronicles (pp. 49–52).
- G. Edward Griffin's The Creature From Jekyll Island, American Media, 2006.
- Also see The Lost Science of Money—The Story of Power by Stephen Zarlenga, American Monetary Institute, 2002; and The Web of Debt: The Shocking Truth About Our Money System—The Slight of Hand That has Trapped Us in Debt And How We Can Break Free, by Ellen Hodgson Brown, Third Millennium Press, 2007. Ellen Brown's web page also has a blog with numerous articles and reader comments.
- For more information, including videos about this complicated subject, Google "debt based monetary system."