- Answer True or False
- 1. The Federal Reserve System is an Agency of the Federal
- 2. The Fed has the exclusive authority to print and issue
all U.S. currency?
- 3. Interest on money loaned by the Fed to its member
banks is used to reduce the Federal Draft?
- 4. The Fed is restricted to an amount of currency it
can print by a specified amount of gold held as reserves?
- 5. The books of the Fed are audited on an annual basis
and are of public record?
- 6. The Fed is responsible for loan losses such as the
banking debacle of the late 1980's?
- 7. Although the President appoints the chairman of the
Federal Reserve Board, the Chairman acts independently?
- 8. The Fed sets interest rates?
- 9. The Fed confines its monetary activities strictly
to the U.S.?
- 10. Americans can benefit from an understanding of how
the Fed works?
- ANSWERS TO: TEST YOUR FED IQ
- 1. False. The Federal Reserve System was created by the
Federal Reserve Act, and passed by both houses of Congress just prior to
Christmas recess on December 22, 1913. Section 5 of the Act calls for a
member bank to buy and hold stock in a district Federal Reserve Bank equal
to 6% of its capital and surplus. For example, as of 1983, ten major New
York City banks owned approximately 66% of the outstanding stock in the
Federal Reserve Bank of New York. That Bank in turn owns a portion of the
stock in the Federal Reserve Bank of the U.S. together with the eleven
regional member banks. A review of the major stockholders of the ten New
York city banks clearly shows that a few families related by blood, marriage
or business interests control those 10 New York city banks, which in turn,
hold the controlling stock in the Federal Reserve Bank of New York. In
addition, approximately 38% of the stock of the Federal Reserve Bank of
New York (as of 1983) was held by banks that are subsidiaries of foreign
banks, namely the House of Rothschild which controls the Bank of England.
The fact that the Federal Reserve System is controlled by private interests
is one of the best kept secrets in American history.
- 2. False. Article 1, Sec. 8 of the U.S. Constitution
provides that "The Congress shall have power to borrow money on the
credit of the United States...and to coin money, regulate the value thereof,
and of foreign coin, and fix the Standard of Weights and Measures."
According to the National Recovery Act (NRA) decision in the 1930's, Congress
can not delegate the power to coin money to the Federal Reserve System.
However, during the great depression and during Franklin D. Roosevelt's
first term as President, the U.S. went off the gold standard and gold and
silver Treasury Certificates were gradually replaced by Federal Reserve
Notes Which are "coined" by the Fed in violation of the Constitution.
- 3. False. Prior to 1933, the Federal Reserve Act required
that a portion of the earnings of the Federal Reserve Banks go to the government,
but the banks never complied. The Banking Act of 1933 legislated that all
earnings of the Federal Reserve Banks go to the banks themselves. The assets
of the Federal Reserve Banks increased from $143 million dollars in 1913
to $45 billion dollars in 1949, which enriched all of the shareholders
of the banks. There is no evidence that the law or the method of accounting
of earnings has changed since 1949.
- 4. False. The Fed has no restriction on the amount of
money it can create since the U.S. went off the gold standard in the 1930's.
As Congressman Wright Patman said in 1964, " The dollar represents
a one dollar debt to the Federal Reserve System. The Federal Reserve Banks
create money out of thin air to buy Government Bonds from the U.S. Treasury...and
has created out of nothing a ....debt which the American people are obliged
to pay with interest." In 1958 the U.S. owned $700 million ounces
of gold. Today the nations bullion reserves have dwindled to a mere 281,000,000
ounces ($100 billion dollars) which is minuscule in relationship to the
amount of paper currency in circulation and the amount of Treasury debt.
The goal of the Fed is to make gold irrelevant as a measure of monetary
value so it can continue to print an unlimited amount of paper currency.
- 5. False. Despite numerous attempts by Congressman Wright
Patman and others who have called for an audit of the books of the Federal
Reserve System, no audit has been made available to the public since the
System was founded in 1913. On March 1, 1982, the Arizona State Legislature,
as well as a number of other states passed a resolution calling for the
abolishment of the Federal Reserve System. All efforts to expose and change
the System have been thwarted.
- 6. False. Easy, Fed monetary policy in the late 1970's
led to double digit inflation and a prime rate that eventually reached
21.5% in 1981. This caused the collapse of the Savings and Loan Industry.
Congress, accommodating the banking lobby, passed the Garn-St Germain Act
to bail out the Savings and Loans. Stimulated by a rush of new money created
by the Fed, attractive real estate tax laws, and the authority to directly
invest in real estate deals, the Savings and Loans quickly created a speculative
bubble of overvalued real estate. By 1990 the massive amount of bad real
estate loans caused a banking crisis. The Resolution Trust Corp. was formed
to market foreclosed real estate, and the biggest write down of real estate
assets since the Great Depression began. Thus, in a period of 12 years,
the Fed was obliged to bail out both the Savings and Loan and the banking
industries as a direct result of its own monetary policy. Incredibly, the
losses were absorbed, not by the Fed, but by the taxpayers and the shareholders
of the local institutions that collapsed. Millions of Americans went bankrupt
in the early 1990's and to this day don't understand what happened.
- 7. False. The history of the Federal Reserve System in
the U.S. is a study of money and power and its ability to determine world
events. A small group of elitists, their successors and assigns have been
able to influence public opinion through control of the media, elect or
discharge Presidents and politicians, make wars and cause economic booms
and busts. Neither the President of the U.S., nor the Chairman of The Federal
Reserve Board act independently. They both hold office at the discretion
of those who control the Federal Reserve System and those wealthy elitists
who are intent on establishing a New World order. Alan Greenspan said in
1966 "The abandonment of the gold standard made it possible for the
welfare statists to use the banking system as a means to an unlimited expansion
- Greenspan's view changed dramatically after he became
a director of J.P. Morgan and Co. and later the Fed Chairman.
- 8. False. The markets and the demand for money ultimately
determine interest rates. The fed sets in the Discount Rate (the rate at
which member banks borrow from the Fed) and the Fed Funds Rate. (the rate
which banks charge each other on overnight funds) Both of these rates are
short-term interest rates. At present the Fed is increasing these rates
while at the same time maintaining that inflation is only 2.6% and not
a problem. Low rates and an increase in the money supply have fueled a
"speculative bubble" in the stock market. Additional increases
in rates could slow the economy and cause a market crash. The Fed has found
itself again in a dilemma which it created.
- 9. False. The fed has acted directly as bank of "last
resort." Normally, loans to other countries would be made by the International
Monetary Fund, the Bank of International Settlements or other entities
which are primarily funded by the Fed. In the case of Mexico, however,
the Fed made a loan directly to that country after the President by-passed
Congress and issued an Executive Order. Reliable sources indicate that
the Fed has recently delivered approximately $40 billion newly printed
$100 bills to Russian banks which are controlled by the Russian Mafia.
Since 1940 the U.S. dollar has lost 94% of its value. The prolific printing
of our currency, the mounting $5.3 trillion in Federal Debt and the widening
trade deficit could soon result in the crash of the U.S. dollar and disastrous
ramifications for Americans.
- 10. True. 66% of the Gross Domestic Product (GDP) in
the U.S. is consumer spending, and the spending habits of the American
people are greatly influenced by the cost of money. Understanding an overview
of how the Fed works and anticipating a major shift in monetary policy
can be extremely critical for a business person as well as an investor.
The bottom line question is: Whose interest does the Federal Reserve serve?
The bankers or the people? Now you know the answer to that question.
- SOURCE: "Secrets of The Federal Reserve" by
Eustace Mullins. Available from We Hold These Truths for $15.00.
- The ABCs Of The Fed
- From Brasscheck <email@example.com
- The Federal Reserve System may be the most fascinating
long term deceptions of 20th century American history. Perhaps now as we
approach the 21st century, it's time to let the cat out of the bag.
- We the people control it, right?
- No, in fact, it is legally controlled by a handful of
major banks which in turn are controlled by a handful of major stockholders.
The presidential appointments, the Congressional hearings etc. are all
- Here's another interesting little known fact about this
group that controls the US currency: There has been no public audit of
the organization since it was founded in 1913 though requests for such
have been numerous.
- From what I understand, the Fed was created so that JP
Morgan could get the money back it lost on loans to the UK in the early
part of this century. Ever since then, Fed "policy" has neatly
dovetailed with the interests of the banks which control it. Bottom line:
they can't lose.
- If you look into this, you are in for a shock when you
learn how new money is created in this country, who benefits from its creation,
and who gets stuck with all the liabilities. (Hint to the last point: it
isn't the banks.)
- If you control the currency, you pretty much control
the country so this stuff matters - a lot.
- The depth at which this information has been buried
is remarkable. It also represents an outstanding example of censorship
through declaration. "Anyone who even raises the subject is a "crack
pot" (or, to use contemporary language a conspiracy theorist.)
- There's a good, quick intro to the subject here:
- Many of the people who follow this have a strong interest
in gold and a faith in it as an economic stabilizer. Before you dismiss
such people, study the manipulation of the gold market in recent years
(apparently by the US Treasury and a handful of big banks). Also, it's
still a fact that gold is the *only* material that is accepted to settle
debts in and between every country on earth. It's accepted in Djakarta
as readily as in Detroit, and on Wall Street as readily as in a roadless
village in India.
- Paper is convenient, but when the s*** hits the fan (in
Germany in the 1920s, in Vietnam when the US pulled out, and recently in
Asia when currencies collapsed domino style), those with gold ate. Those
with paper had... paper.
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