On Wed, 5 Dec 2007 11:17:24 -0800, "P. Maffia"
<pmaffia[at]centurytel.net> wrote:

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a waste of time...every time you squish one of the idiots another
starts bleating the tripe

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web site at www.abelard.org - news comment service, logic, economics
energy, education, politics, etc 1,552,396 document calls in year past
------------------------------------------------ all that is necessary for [] walk quietly and carry
the triumph of evil is that [] a big stick.
good people do nothing [] trust actions not words
only when it's funny -- roger rabbit
------------------------------------------------

Another moron enters the fray with gibberish about the Federal Reserve.

Hobo, despite what the comic books you read say, Congress still controls our
money and the Federal Reserve IS NOT A PRIVATE BANKING SYSTEM.

"Hobo" <dfgsdgt546456rtg[at]googlemail.com> wrote in message
news:169efc11-f3e7-4a95-9ed6-278a52651265[at]s8g2000prg.googlegroups.com...
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Ellen Brown, July 3rd, 2007
http://www.webofdebt.com/articles/dollar-deception.php

It has been called "the most astounding piece of sleight of hand ever
invented." The creation of money has been privatized, usurped from
Congress by a private banking cartel. Most people think money is
issued by fiat by the government, but that is not the case. Except for
coins, which compose only about one one-thousandth of the total U.S.
money supply, all of our money is now created by banks. Federal
Reserve Notes (dollar bills) are issued by the Federal Reserve, a
private banking corporation, and lent to the government.1 Moreover,
Federal Reserve Notes and coins together compose less than 3 percent
of the money supply. The other 97 percent is created by commercial
banks as loans.2

Don't believe banks create the money they lend? Neither did the jury
in a landmark Minnesota case, until they heard the evidence. First
National Bank of Montgomery vs. Daly (1969) was a courtroom drama
worthy of a movie script.3 Defendant Jerome Daly opposed the bank's
foreclosure on his $14,000 home mortgage loan on the ground that there
was no consideration for the loan. "Consideration" ("the thing
exchanged") is an essential element of a contract. Daly, an attorney
representing himself, argued that the bank had put up no real money
for his loan. The courtroom proceedings were recorded by Associate
Justice Bill Drexler, whose chief role, he said, was to keep order in
a highly charged courtroom where the attorneys were threatening a fist
fight. Drexler hadn't given much credence to the theory of the
defense, until Mr. Morgan, the bank's president, took the stand. To
everyone's surprise, Morgan admitted that the bank routinely created
money "out of thin air" for its loans, and that this was standard
banking practice. "It sounds like fraud to me," intoned Presiding
Justice Martin Mahoney amid nods from the jurors. In his court
memorandum, Justice Mahoney stated:

Plaintiff admitted that it, in combination with the Federal
Reserve Bank of Minneapolis, . . . did create the entire $14,000.00 in
money and credit upon its own books by bookkeeping entry. That this
was the consideration used to support the Note dated May 8, 1964 and
the Mortgage of the same date. The money and credit first came into
existence when they created it. Mr. Morgan admitted that no United
States Law or Statute existed which gave him the right to do this. A
lawful consideration must exist and be tendered to support the Note.

The court rejected the bank's claim for foreclosure, and the defendant
kept his house. To Daly, the implications were enormous. If bankers
were indeed extending credit without consideration - without backing
their loans with money they actually had in their vaults and were
entitled to lend - a decision declaring their loans void could topple
the power base of the world. He wrote in a local news article:

This decision, which is legally sound, has the effect of declaring
all private mortgages on real and personal property, and all U.S. and
State bonds held by the Federal Reserve, National and State banks to
be null and void. This amounts to an emancipation of this Nation from
personal, national and state debt purportedly owed to this banking
system. Every American owes it to himself . . . to study this decision
very carefully . . . for upon it hangs the question of freedom or
slavery.

Needless to say, however, the decision failed to change prevailing
practice, although it was never overruled. It was heard in a Justice
of the Peace Court, an autonomous court system dating back to those
frontier days when defendants had trouble traveling to big cities to
respond to summonses. In that system (which has now been phased out),
judges and courts were pretty much on their own. Justice Mahoney, who
was not dependent on campaign financing or hamstrung by precedent,
went so far as to threaten to prosecute and expose the bank. He died
less than six months after the trial, in a mysterious accident that
appeared to involve poisoning.4 Since that time, a number of
defendants have attempted to avoid loan defaults using the defense
Daly raised; but they have met with only limited success. As one judge
said off the record:

If I let you do that - you and everyone else - it would bring the
whole system down. . . . I cannot let you go behind the bar of the
bank. . . . We are not going behind that curtain!5

From time to time, however, the curtain has been lifted long enough
for us to see behind it. A number of reputable authorities have
attested to what is going on, including Sir Josiah Stamp, president of
the Bank of England and the second richest man in Britain in the
1920s. He declared in an address at the University of Texas in 1927:

The modern banking system manufactures money out of nothing. The
process is perhaps the most astounding piece of sleight of hand that
was ever invented. Banking was conceived in inequity and born in
sin . . . . Bankers own the earth. Take it away from them but leave
them the power to create money, and, with a flick of a pen, they will
create enough money to buy it back again. . . . Take this great power
away from them and all great fortunes like mine will disappear, for
then this would be a better and happier world to live in. . . . But,
if you want to continue to be the slaves of bankers and pay the cost
of your own slavery, then let bankers continue to create money and
control credit.

Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of
Atlanta in the Great Depression, wrote in 1934:

We are completely dependent on the commercial Banks. Someone has
to borrow every dollar we have in circulation, cash or credit. If the
Banks create ample synthetic money we are prosperous; if not, we
starve. We are absolutely without a permanent money system. When one
gets a complete grasp of the picture, the tragic absurdity of our
hopeless position is almost incredible, but there it is. It is the
most important subject intelligent persons can investigate and reflect
upon.6

Graham Towers, Governor of the Bank of Canada from 1935 to 1955,
acknowledged:

Banks create money. That is what they are for. . . . The
manufacturing process to make money consists of making an entry in a
book. That is all. . . . Each and every time a Bank makes a loan . . .
new Bank credit is created -- brand new money.7

Robert B. Anderson, Secretary of the Treasury under Eisenhower, said
in an interview reported in the August 31, 1959 issue of U.S. News and
World Report:

[W]hen a bank makes a loan, it simply adds to the borrower's
deposit account in the bank by the amount of the loan. The money is
not taken from anyone else's deposit; it was not previously paid in to
the bank by anyone. It's new money, created by the bank for the use of
the borrower.

How did this scheme originate, and how has it been concealed for so
many years? To answer those questions, we need to go back to the
seventeenth century.

The Shell Game of the Goldsmiths

In seventeenth century Europe, trade was conducted primarily in gold
and silver coins. Coins were durable and had value in themselves, but
they were hard to transport in bulk and could be stolen if not kept
under lock and key. Many people therefore deposited their coins with
the goldsmiths, who had the strongest safes in town. The goldsmiths
issued convenient paper receipts that could be traded in place of the
bulkier coins they represented. These receipts were also used when
people who needed coins came to the goldsmiths for loans.

The mischief began when the goldsmiths noticed that only about 10 to
20 percent of their receipts came back to be redeemed in gold at any
one time. They could safely "lend" the gold in their strongboxes at
interest several times over, as long as they kept 10 to 20 percent of
the value of their outstanding loans in gold to meet the demand. They
thus created "paper money" (receipts for loans of gold) worth several
times the gold they actually held. They typically issued notes and
made loans in amounts that were four to five times their actual supply
of gold. At an interest rate of 20 percent, the same gold lent five
times over produced a 100 percent return every year, on gold the
goldsmiths did not actually own and could not legally lend at all. If
they were careful not to overextend this "credit," the goldsmiths
could thus become quite wealthy without producing anything of value
themselves. Since only the principal was lent into the money supply,
more money was eventually owed back in principal and interest than the
townspeople as a whole possessed. They had to continually take out
loans of new paper money to cover the shortfall, causing the wealth of
the town and eventually of the country to be siphoned into the vaults
of the goldsmiths-turned-bankers, while the people fell progressively
into their debt.8

Following this model, in nineteenth century America, private banks
issued their own banknotes in sums up to ten times their actual
reserves in gold. This was called "fractional reserve" banking,
meaning that only a fraction of the total deposits managed by a bank
were kept in "reserve" to meet the demands of depositors. But periodic
runs on the banks when the customers all got suspicious and demanded
their gold at the same time caused banks to go bankrupt and made the
system unstable. In 1913, the private banknote system was therefore
consolidated into a national banknote system under the Federal Reserve
(or "Fed"), a privately-owned corporation given the right to issue
Federal Reserve Notes and lend them to the U.S. government. These
notes, which were issued by the Fed basically for the cost of printing
them, came to form the basis of the national money supply.

Twenty years later, the country faced massive depression. The money
supply shrank, as banks closed their doors and gold fled to Europe.
Dollars at that time had to be 40 percent backed by gold, so for every
dollar's worth of gold that left the country, 2.5 dollars in credit
money also disappeared. To prevent this alarming deflationary spiral
from collapsing the money supply completely, in 1933 President
Franklin Roosevelt took the dollar off the gold standard. Today the
Federal Reserve still operates on the "fractional reserve" system, but
its "reserves" consist of nothing but government bonds (I.O.U.s or
debts). The government issues bonds, the Federal Reserve issues
Federal Reserve Notes, and they basically swap stacks, leaving the
government in debt to a private banking corporation for money the
government could have issued itself, debt-free.

Theft by Inflation

M3, the broadest measure of the U.S. money supply, shot up from $3.7
trillion in February 1988 to $10.3 trillion 14 years later, when the
Fed quit reporting it. Why the Fed quit reporting it in March 2006 is
suggested by John Williams in a website called "Shadow Government
Statistics" (shadowstats.com), which shows that by the spring of 2007,
M3 was growing at the astounding rate of 11.8 percent per year. Best
not to publicize such figures too widely! The question posed here,
however, is this: where did all this new money come from? The
government did not step up its output of coins, and no gold was added
to the national money supply, since the government went off the gold
standard in 1933. This new money could only have been created
privately as "bank credit" advanced as loans.

The problem with inflating the money supply in this way, of course, is
that it inflates prices. More money competing for the same goods
drives prices up. The dollar buys less, robbing people of the value of
their money. This rampant inflation is usually blamed on the
government, which is accused of running the dollar printing presses in
order to spend and spend without resorting to the politically
unpopular expedient of raising taxes. But as noted earlier, the only
money the U.S. government actually issues are coins. In countries in
which the central bank has been nationalized, paper money may be
issued by the government along with coins, but paper money still
composes only a very small percentage of the money supply. In England,
where the Bank of England was nationalized after World War II, private
banks continue to create 97 percent of the money supply as loans.9

Price inflation is only one problem with this system of private money
creation. Another is that banks create only the principal but not the
interest necessary to pay back their loans. Since virtually the entire
money supply is created by banks themselves, new money must
continually be borrowed into existence just to pay the interest owed
to the bankers. A dollar lent at 5 percent interest becomes 2 dollars
in 14 years. That means the money supply has to double every 14 years
just to cover the interest owed on the money existing at the beginning
of this 14 year cycle. The Federal Reserve's own figures confirm that
M3 has doubled or more every 14 years since 1959, when the Fed began
reporting it. 10 That means that every 14 years, banks siphon off as
much money in interest as there was in the entire economy 14 years
earlier. This tribute is paid for lending something the banks never
actually had to lend, making it perhaps the greatest scam ever
perpetrated, since it now affects the entire global economy. The
privatization of money is the underlying cause of poverty, economic
slavery, underfunded government, and an oligarchical ruling class that
thwarts every attempt to shake it loose from the reins of power.

This problem can only be set right by reversing the process that
created it. Congress needs to take back the Constitutional power to
issue the nation's money. "Fractional reserve" banking needs to be
eliminated, limiting banks to lending only pre-existing funds. If the
power to create money were returned to the government, the federal
debt could be paid off, taxes could be slashed, and needed government
programs could be expanded. Contrary to popular belief, paying off the
federal debt with new U.S. Notes would not be dangerously
inflationary, because government securities are already included in
the widest measure of the money supply. The dollars would just replace
the bonds, leaving the total unchanged. If the U.S. federal debt had
been paid off in fiscal year 2006, the savings to the government from
no longer having to pay interest would have been $406 billion, enough
to eliminate the $390 billion budget deficit that year with money to
spare. The budget could have been met with taxes, without creating
money out of nothing either on a government print press or as
accounting entry bank loans. However, some money created on a
government printing press could actually be good for the economy. It
would be good if it were used for the productive purpose of creating
new goods and services, rather than for the non-productive purpose of
paying interest on loans. When supply (goods and services) goes up
along with demand (money), they remain in balance and prices remain
stable. New money could be added without creating price inflation up
to the point of full employment. In this way Congress could fund much-
needed programs, such as the development of alternative energy sources
and the expansion of health coverage, while actually reducing taxes.

___________________
1 Wright Patman, A Primer on Money (Government Printing Office,
prepared for the Sub-committee on Domestic Finance, House of
Representatives, Committee on Banking and Currency, 88th Congress, 2nd
session, 1964).

2 See Federal Reserve Statistical Release H6, "Money Stock Measures,"
www.federalreserve.gov/releases/H6/20060223 (February 23, 2006);
"United States Mint 2004 Annual Report," www.usmint.gov; Ellen Brown,
Web of Debt, www.webofdebt.com (2007), chapter 2.

3 "A Landmark Decision," The Daily Eagle (Montgomery, Minnesota:
February 7, 1969), reprinted in part in P. Cook, "What Banks Don't
Want You to Know," www9.pair.com/xpoez/money/cook (June 3, 1993).

4 See Bill Drexler, "The Mahoney Credit River Decision,"
http://www.worldnewsstand.net/money/...roduction.html.

5 G. Edward Griffin, "Debt-cancellation Programs," www.freedomforceinternational.org
(December 18, 2003).

6 In the Foreword to Irving Fisher, 100% Money (1935), reprinted by
Pickering and Chatto Ltd. (1996).

7 Quoted in "Someone Has to Print the Nation's Money . . . So Why Not
Our Government?", Monetary Reform Online, reprinted from Victoria
Times Colonist (October 16, 1996).

8 Chicago Federal Reserve, "Modern Money Mechanics" (1963),
originally produced and distributed free by the Public Information
Center of the Federal Reserve Bank of Chicago, Chicago, Illinois, now
available on the Internet at http://landru.i-link-2.net/monques/mmm2.html;
Patrick Carmack, Bill Still, The Money Masters: How International
Bankers Gained Control of America (video, 1998), text at
http://users.cyberone.com.au/myers/money-masters.html.

9 James Robertson, John Bunzl, Monetary Reform: Making It Happen
(2003), www.jamesrobertson.com, page 26.

10 Board of Governors of the Federal Reserve, "M3 Money Stock
(discontinued series)," http://research.stlouisfed.org/fred2/data/M3SL.txt.