Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The US Does Not Own Or Control Its Money System

Politics / Central Banks Sep 29, 2010 - 03:18 AM GMT

By: Graham_Summers

Politics

Best Financial Markets Analysis ArticleWhat is money?

Most of our adult lives are devoted to making this stuff. Next to food, water, and sleep it’s the #1 concern for most human beings in the US. Nearly 80% of divorced couples cite financial difficulties as a reason for the divorce.  And the American Psychological Association reports that 73% of Americans cite money as a source of significant stress.


And yet, despite being the medium for every economic transaction in our financial system, few if any individuals actually understand what money is and how it works in today’s Federal Reserve banking system.

So I ask again, what is money?

The common answer is: Dollar bills or coins.

The common answer is wrong.

The US monetary system is in fact entirely backed-by debt. Dollars are not actually assets, they are debt-backed instruments produced by the Federal Reserve. I realize this is difficult to swallow, but have a look at the Dollar bill itself.

Note the top of the bill does NOT read “US Dollar” or “official currency of the United States.” Instead it reads “Federal Reserve Note.”

So this bill is in fact, NOT produced or controlled by the US Government. . Instead, it’s a note issued by the Federal Reserve.

The confusion continues if you look around the rest of the Dollar’s front. Nowhere does it state that the bill was produced by the US Government or was generated in a Federal facility. Instead you see a black circle on the left that reads “Federal Reserve Bank of San Francisco,” indicating that this particular note entered circulation via the Federal Reserve Bank of San Francisco.
 

But surely this is just a round about way of saying the Dollar is the US’s currency, right? After all, the Federal Reserve is a branch of the US Government.

Wrong. The Federal Reserve is in fact a privately held organization. If you go to the Federal Reserve’s website you will see that while it IS a .gov web address (http://www.federalreserve.gov/), the site itself is for “The Board of Governors of the Federal Reserve System,” or the management of the Federal Reserve, NOT the Federal Reserve System itself.

Nowhere does this site state what the Fed really is, who owns it, or how it even operates. Instead, all you see are profiles of the various members of the Board of Governors (including current Fed Chairman Ben Bernanke) and articles detailing the data the Fed tracks and the policies it enacts.

Imagine if General Motors’ website made no mention of cars or trucks but simply focused on GM’s management team and the policies they employ at the company. THAT’S the equivalent of the Federal Reserve’s website.

Now, the Federal Reserve DOES maintain another website that focuses more on the Federal Reserve Banking System’s services, however this website is NOT a .gov site, but a .org site: http://www.frbservices.org/, meaning it has NO involvement with the US Federal Government/

Which brings me to shocking truth #1: The US Government neither owns nor controls the US Federal Reserve. At best, the US Federal Reserve is a quasi-governmental organization.

The President of the United States does choose the Chairman of the Federal Reserve’s Board of Governors. However, even this setup is a farce as the Fed presents candidates from whom the President can choose from. Moreover, the confirmation of a Fed Chairman takes place in Congress, whose members receive incentives both monetary and other from Fed lobbyists as the below quote attests:

"I was advised that rejecting [Bernanke's] nomination would cause markets to nose dive, which would hurt retirees and families saving for their future. I am not enthusiastic in my support. " - Senator Barbara Mikulski (D- MD)

Thus, even the Government’s appointment of the Chairman of the Board of Governors of the Federal Reserve is a farce. It is at best a dramatic gesture meant to instill the notion that the Fed is somehow affiliated with or controlled by the US Federal Government.

However, in reality the Fed is a totally separate entity, a privately held organization controlled by the most powerful people on the planet. To put it plainly, the Fed is a cartel permitted to operate and control the US monetary system with the approval of the US Government.

This is why the US Dollar states “Federal Reserve Note” instead of  “Currency of the United States” or “Produced by the US Government for the Citizens of the United States of America” or some such thing.

The US Government didn’t create the US Federal Reserve system, all it did was give the latter its seal of approval metaphorically (by passing the Federal Reserve act of 1913 which created the Fed as a legal entity and gave it control of the US monetary system) AND literally (by placing the US Treasury Seal on every Federal Reserve Note the Fed produces):

It’s one of the best hidden secrets in the world… and yet it’s staring all of us in the face. How many Americans realize this? Better yet, how many Americans realize that our entire money system is in fact backed by debt?

1 in 100,000?

1 in 1,000,000?

Good Investing!

Graham Summers

http://gainspainscapital.com

PS. If you’re worried about the future of the stock market, I highly suggest you download my FREE Special Report detailing SEVERAL investments that could shelter your portfolio from any future collapse. Pick up your FREE copy of The Financial Crisis “Round Two” Survival Kit, today at: http://www.gainspainscapital.com/MARKETING/roundtwo.html

Graham Summers: Graham is Senior Market Strategist at OmniSans Research. He is co-editor of Gain, Pains, and Capital, OmniSans Research’s FREE daily e-letter covering the equity, commodity, currency, and real estate markets. 

Graham also writes Private Wealth Advisory, a monthly investment advisory focusing on the most lucrative investment opportunities the financial markets have to offer. Graham understands the big picture from both a macro-economic and capital in/outflow perspective. He translates his understanding into finding trends and undervalued investment opportunities months before the markets catch on: the Private Wealth Advisory portfolio has outperformed the S&P 500 three of the last five years, including a 7% return in 2008 vs. a 37% loss for the S&P 500.

Previously, Graham worked as a Senior Financial Analyst covering global markets for several investment firms in the Mid-Atlantic region. He’s lived and performed research in Europe, Asia, the Middle East, and the United States.

© 2010 Copyright Graham Summers - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Graham Summers Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in