Who owns the US dollar?
Business » Finance For more articles click here
At first glance, this would seem like a rather silly, stupid and pointless question. Why, the average person would answer, the American people own it. Or rather, if one had to get more technical, the American government, which is in turn, being a Republic, owned by the people, one in the same.
But, as most such simple seeming things in life, the truth is neither simple nor straightforward and the answer is neither silly, stupid or pointless, but indeed is critical to the well being of nations and hundreds of millions if not billions of people.
For the truth of it, neither the people of America nor the government of America owns the US dollar. How's that, you say? Well, if one was to really dive just a bit deeper, before hitting the rocks just under the US greenback pond, one would quickly discover that the actual US dollar has not existed since 1913, where it was effectively killed. What is now called the US dollar is actually a Federal Reserve Note, says it right at the top of each bill.
Why does that matter? Read on.
First of all, a US dollar, as something before 1913, was an instrument of wealth. That piece of paper, or just as common a gold or silver coin, had actual worth, anywhere in the world. It was worth its weight in gold, be it actual gold or paper. A Reserve Note, on the other hand, is a debt instrument, which not only is not wealth but is the opposite of wealth. Its very existence is a sucking sound on wealth, wealth being transferred, in this case not to the poor masses (as defined by defunct Marxism) but to the top 1% (equally defunct).
How is that you say? Why it's quite simple, but for that answer, again, we must follow the rabbit down the rabbit hole.
The Federal Reserve, unbeknownst to many outside the US and almost everyone in the US, is NOT a Federal, that is, government entity. It is about as governmental as Federal Express. In truth, it is a wholly private, untraded, and thus unsupervised, banking corporation, with a secret cabal of owners. One can assess some of those probable owners by those corporations/banks who were bailed out, while others were allowed to die.
Effectively, this private banking concern, the only one of its kind in the world, has the exclusive right to make the US dollar, or rather the Federal Reserve Notes (debt) called the US dollar, the one and only legal tender of America. Now, when the US government wants or needs money, it can not simply "have" money. Put aside the notions about not starting the printing presses and so on. The simple fact is, not only can the US government NOT coin currency, it can not just have it either. Remember, these are Reserve (debt) Notes.
So, when the US government wants money, the Treasury Department prints bonds (promissory notes aka debt obligations) and "sells" these to the Federal Reserve (private banking concern), which than "gives" the US government Federal Reserve Notes (tender). Thus the money the US government and thus in turn, the US people and all peoples and nations in the world who hold dollars (and why do you think they push these on the world so much?) are debt instruments owed to the Federal Reserve, by the holders. Thus, sooner or later you must return them, plus a percentage. Of course, to the Federal Reserve, the percentage is better.
But, let us take this one step further, and here is the really scary part. To note, no one's logic ever seems to go this far, so for many, this may be your final Eureka moment, when you figure out just how screwed and owned you really are.
If the only legal tender is the Federal Reserve Note and it must be paid back at its face value plus percent, again, in Federal Reserve Notes, well how do you do it? Let me explain. If the Fed offers you (like a loan shark) $100 million Federal Reserve Notes and you must pay it back, sooner or later with a 2% add on, thus, let us say, in 1 year, you will owe and must pay $102 million Federal Reserve Notes, well, how do you do it? Simply put, you only have $100 million, where do you get the other $2 million Federal Reserve Notes? You can not print them, you can not mint them, well, you have no choice but to ask the Federal Reserve to print them. Thus you get your $2 million more to pay back the debt, but that itself has a 2% attachment, that again, you must ask the Fed to print and at a percentage and so on into perpetuity....well not really, because in a rather short order, the Fed and its owners will own everything.
Rarely has so brilliant and patient a ponzy scheme been dreamed up than this.
And by exporting it overseas, they are sucking in the rest of the world's finance, into their ever greedy, chubby and purely evil little hands.
So, leaders of the world, why are you giving away the future of your peoples and nations to this tiny group of parasites, who have already bleed the US dead dry, where the top 1% holds over 60% of that nation's raw wealth?
And people of the world, why are you allowing it to happen?
No alternative? This is what cryptocurrency was created to do.
Cut them off and starve the beast.
By Stanislav Mishin & Mat Rodina
- See more at: http://www.pravdareport.com/business/finance/14-09-2010/114921-us_dollar-0/#sthash.Ja6fixwF.dpuf
Who Owns The Federal Reserve?
The Fed is privately owned. Its shareholders are private banks
By Ellen Brown
Global Research, September 30, 2015
Web of Debt and Global Research 8 October 2008
Theme: Global Economy
This article was first published by Global Research in October 2008
“Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders.” – The Honorable Louis McFadden, Chairman of the House Banking and Currency Committee in the 1930s
The Federal Reserve (or Fed) has assumed sweeping new powers in the last year. In an unprecedented move in March 2008, the New York Fed advanced the funds for JPMorgan Chase Bank to buy investment bank Bear Stearns for pennies on the dollar. The deal was particularly controversial because Jamie Dimon, CEO of JPMorgan, sits on the board of the New York Fed and participated in the secret weekend negotiations.1 In September 2008, the Federal Reserve did something even more unprecedented, when it bought the world’s largest insurance company. The Fed announced on September 16 that it was giving an $85 billion loan to American International Group (AIG) for a nearly 80% stake in the mega-insurer. The Associated Press called it a “government takeover,” but this was no ordinary nationalization. Unlike the U.S. Treasury, which took over Fannie Mae and Freddie Mac the week before, the Fed is not a government-owned agency. Also unprecedented was the way the deal was funded. The Associated Press reported:
“The Treasury Department, for the first time in its history, said it would begin selling bonds for the Federal Reserve in an effort to help the central bank deal with its unprecedented borrowing needs.”2
This is extraordinary. Why is the Treasury issuing U.S. government bonds (or debt) to fund the Fed, which is itself supposedly “the lender of last resort” created to fund the banks and the federal government? Yahoo Finance reported on September 17:
“The Treasury is setting up a temporary financing program at the Fed’s request. The program will auction Treasury bills to raise cash for the Fed’s use. The initiative aims to help the Fed manage its balance sheet following its efforts to enhance its liquidity facilities over the previous few quarters.”
Normally, the Fed swaps green pieces of paper called Federal Reserve Notes for pink pieces of paper called U.S. bonds (the federal government’s I.O.U.s), in order to provide Congress with the dollars it cannot raise through taxes. Now, it seems, the government is issuing bonds, not for its own use, but for the use of the Fed! Perhaps the plan is to swap them with the banks’ dodgy derivatives collateral directly, without actually putting them up for sale to outside buyers. According to Wikipedia (which translates Fedspeak into somewhat clearer terms than the Fed’s own website):
“The Term Securities Lending Facility is a 28-day facility that will offer Treasury general collateral to the Federal Reserve Bank of New York’s primary dealers in exchange for other program-eligible collateral. It is intended to promote liquidity in the financing markets for Treasury and other collateral and thus to foster the functioning of financial markets more generally. . . . The resource allows dealers to switch debt that is less liquid for U.S. government securities that are easily tradable.”
“To switch debt that is less liquid for U.S. government securities that are easily tradable” means that the government gets the banks’ toxic derivative debt, and the banks get the government’s triple-A securities. Unlike the risky derivative debt, federal securities are considered “risk-free” for purposes of determining capital requirements, allowing the banks to improve their capital position so they can make new loans. (See E. Brown, “Bailout Bedlam,” webofdebt.com/articles, October 2, 2008.)
In its latest power play, on October 3, 2008, the Fed acquired the ability to pay interest to its member banks on the reserves the banks maintain at the Fed. Reuters reported on October 3:
“The U.S. Federal Reserve gained a key tactical tool from the $700 billion financial rescue package signed into law on Friday that will help it channel funds into parched credit markets. Tucked into the 451-page bill is a provision that lets the Fed pay interest on the reserves banks are required to hold at the central bank.”3
If the Fed’s money comes ultimately from the taxpayers, that means we the taxpayers are paying interest to the banks on the banks’ own reserves – reserves maintained for their own private profit. These increasingly controversial encroachments on the public purse warrant a closer look at the central banking scheme itself. Who owns the Federal Reserve, who actually controls it, where does it get its money, and whose interests is it serving?
Not Private and Not for Profit?
The Fed’s website insists that it is not a private corporation, is not operated for profit, and is not funded by Congress. But is that true? The Federal Reserve was set up in 1913 as a “lender of last resort” to backstop bank runs, following a particularly bad bank panic in 1907. The Fed’s mandate was then and continues to be to keep the private banking system intact; and that means keeping intact the system’s most valuable asset, a monopoly on creating the national money supply. Except for coins, every dollar in circulation is now created privately as a debt to the Federal Reserve or the banking system it heads.4 The Fed’s website attempts to gloss over its role as chief defender and protector of this private banking club, but let’s take a closer look. The website states:
* “The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations – possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.”
* “[The Federal Reserve] is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.”
* “The Federal Reserve’s income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. . . . After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury.”5
So let’s review:
1. The Fed is privately owned.
Its shareholders are private banks. In fact, 100% of its shareholders are private banks. None of its stock is owned by the government.
2. The fact that the Fed does not get “appropriations” from Congress basically means that it gets its money from Congress without congressional approval, by engaging in “open market operations.”
Here is how it works: When the government is short of funds, the Treasury issues bonds and delivers them to bond dealers, which auction them off. When the Fed wants to “expand the money supply” (create money), it steps in and buys bonds from these dealers with newly-issued dollars acquired by the Fed for the cost of writing them into an account on a computer screen. These maneuvers are called “open market operations” because the Fed buys the bonds on the “open market” from the bond dealers. The bonds then become the “reserves” that the banking establishment uses to back its loans. In another bit of sleight of hand known as “fractional reserve” lending, the same reserves are lent many times over, further expanding the money supply, generating interest for the banks with each loan. It was this money-creating process that prompted Wright Patman, Chairman of the House Banking and Currency Committee in the 1960s, to call the Federal Reserve “a total money-making machine.” He wrote:
“When the Federal Reserve writes a check for a government bond it does exactly what any bank does, it creates money, it created money purely and simply by writing a check.”
3. The Fed generates profits for its shareholders.
The interest on bonds acquired with its newly-issued Federal Reserve Notes pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders. A mere 6% a year may not be considered a profit in the world of Wall Street high finance, but most businesses that manage to cover all their expenses and give their shareholders a guaranteed 6% return are considered “for profit” corporations.
In addition to this guaranteed 6%, the banks will now be getting interest from the taxpayers on their “reserves.” The basic reserve requirement set by the Federal Reserve is 10%. The website of the Federal Reserve Bank of New York explains that as money is redeposited and relent throughout the banking system, this 10% held in “reserve” can be fanned into ten times that sum in loans; that is, $10,000 in reserves becomes $100,000 in loans. Federal Reserve Statistical Release H.8 puts the total “loans and leases in bank credit” as of September 24, 2008 at $7,049 billion. Ten percent of that is $700 billion. That means we the taxpayers will be paying interest to the banks on at least $700 billion annually – this so that the banks can retain the reserves to accumulate interest on ten times that sum in loans.
The banks earn these returns from the taxpayers for the privilege of having the banks’ interests protected by an all-powerful independent private central bank, even when those interests may be opposed to the taxpayers’ — for example, when the banks use their special status as private money creators to fund speculative derivative schemes that threaten to collapse the U.S. economy. Among other special benefits, banks and other financial institutions (but not other corporations) can borrow at the low Fed funds rate of about 2%. They can then turn around and put this money into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks. A long list of banks (but not other corporations) is also now protected from the short selling that can crash the price of other stocks.
Time to Change the Statute?
According to the Fed’s website, the control Congress has over the Federal Reserve is limited to this:
“[T]he Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute.”
As we know from watching the business news, “oversight” basically means that Congress gets to see the results when it’s over. The Fed periodically reports to Congress, but the Fed doesn’t ask; it tells. The onlyreal leverage Congress has over the Fed is that it “can alter its responsibilities by statute.” It is time for Congress to exercise that leverage and make the Federal Reserve a truly federal agency, acting by and for the people through their elected representatives. If the Fed can demand AIG’s stock in return for an $85 billion loan to the mega-insurer, we can demand the Fed’s stock in return for the trillion-or-so dollars we’ll be advancing to bail out the private banking system from its follies.
If the Fed were actually a federal agency, the government could issue U.S. legal tender directly, avoiding an unnecessary interest-bearing debt to private middlemen who create the money out of thin air themselves. Among other benefits to the taxpayers. a truly “federal” Federal Reserve could lend the full faith and credit of the United States to state and local governments interest-free, cutting the cost of infrastructure in half, restoring the thriving local economies of earlier decades.
Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her eleven books include the bestselling Nature’s Pharmacy, co-authored with Dr. Lynne Walker, and Forbidden Medicine. Her websites arewww.webofdebt.com and www.ellenbrown.com .
The original source of this article is Web of Debt and Global Research
Copyright © Ellen Brown, Web of Debt and Global Research, 2015
Inside the Secret Meeting Where Wall Street Tested Digital Cash
By Matthew Leising May 2, 2016 9:00 AM
On a recent Monday in April, more than 100 executives from some of the world’s largest financial institutions gathered for a private meeting at the Times Square office of Nasdaq Inc. They weren’t there to just talk about blockchain, the new technology some predict will transform finance, but to build and experiment with the software.
By the end of the day, they had seen something revolutionary: U.S. dollars transformed into pure digital assets, able to be used to execute and settle a trade instantly. That’s the promise of a blockchain, where the cumbersome and error-prone system that takes days to move money across town or around the world is replaced with almost instant certainty. The event was created by Chain, one of many startups trying to rewire the financial industry, with representatives from Nasdaq, Citigroup Inc., Visa Inc., Fidelity, Fiserv Inc., Pfizer Inc. and others in the room.
More from Bloomberg.com: Halliburton, Baker Hughes Quit $28 Billion Merger Agreement
The event -- announced in a statement this Monday -- marked a key moment in the evolution of blockchain, notable both for what was achieved, as well as how many firms were involved. The technology’s potential has captivated Wall Street executives because it offers a way to free up billions of dollars by speeding transactions that currently can take days, tying up capital. But a huge piece of that puzzle is transforming cash into a digital form. And while some firms have conducted experiments, the Chain event showed a large number of them are now looking jointly at a potential solution.
“We created a digital dollar” to show the group at Nasdaq an instant debit and credit on a blockchain, said Marc West, chief technology officer at Fiserv, a transaction and payments company with more than 13,000 clients across the financial industry. “This is the first time the money has moved.”
More from Bloomberg.com: Australian Craig Wright Identifies Self as Bitcoin Creator
Chain is already known in some Wall Street circles for its project to help Nasdaq shift trading of non-public company shares onto a blockchain. But for the most part, it has kept relatively quiet compared with other fintech ventures.
The San Francisco-based company also used the April 11 meeting to introduce its customers and investors to Chain Open Standard, an open-source blockchain platform that the venture has been designing for more than a year, said Adam Ludwin, the company’s chief executive officer. What Chain has done is engineer the complicated elements needed for a blockchain to work, so that its customers can build custom solutions on top of that to solve business problems, he said.
“We’ve been quietly building with a whole bunch of folks for a few years,” he said. “Blockchains are networks, so we think collaboration is important, but what’s even more important than collaboration at the beginning is getting the model right.” The event was kept secret so executives could freely share nascent ideas and take risks. “The more press, the less quality of the dialogue and problem-solving,” he said.
The most common blockchain is the one supporting the digital currency bitcoin, which has been active since 2009. Financial firms have been reluctant to embrace bitcoin, however, as its anonymous users could entangle banks in violations of anti-money-laundering and know-your-customer regulations. Digital U.S. dollars, or any other fiat currency, on the other hand, doesn’t pose those risks.
Nasdaq and Citigroup partnered to explore how they can work together, said Brad Peterson, the exchange-owner’s chief information officer. He said blockchain also could be used for reference data -- how specific stocks or bonds are identified across all markets, for example.
Wall Street was one of the earliest beneficiaries of computers replacing office systems. Now 30 years later, those legacy systems can be a hindrance to further technological evolution, he said.
“That’s the great opportunity -- how to unlock that ability to work your way out from under the mainframe era,” he said.
While cash in a bank account moves electronically all the time today, there’s a distinction between that system and what it means to say money is digital. Electronic payments are really just messages that cash needs to move from one account to another, and this reconciliation is what adds time to the payments process. For customers, moving money between accounts can take days as banks wait for confirmations. Digital dollars, however, are pre-loaded into a system like a blockchain. From there, they can be swapped immediately for an asset.
“Instead of a record or message being moved, it’s the actual asset,” Ludwin said. “The payment and the settlement become the same thing.”
Ian Lee, head of Citigroup’s global lab network and acceleration fund, said one of the first areas of research Citigroup undertook when it began studying blockchain was how digital cash could be used. He was impressed with the variety of clients Chain brought together, as collaboration on Wall Street is rare. A lot of companies are facing the same problems with how to make blockchain a reality for their business, he said.
“While blockchain technology has a lot of potential, it will need to integrate with and co-exist with the financial system that exists today,” he said.
Ludwin said blockchain has been validated on Wall Street, and now it’s time to focus on creating solutions.
“Putting it all together is no small amount of work, nor is re-engineering business processes within large organizations,” he said. “This isn’t ‘financial engineering.’ This is software engineering that is going to reshape financial services.”