The truth about the Federal Reserve and banks

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• published: 12 Aug 2012
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The Federal Reserve System is the central banking system for the United States. It was created on December 23, 1913 with the enactment of the Federal Reserve Act. What is Inflation? In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.[1] When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money -- a loss of real value in the internal medium of exchange and unit of account in the economy.[2][3] A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index [normally the Consumer Price Index] over time.[4] http://en.wikipedia.org/wiki/Inflation The subject matter of inflation is the debasement of money ... Under the gold standard, the technique of abusing the medium of the exchange became much more advanced through the issuance of paper money unbacked by gold. Inflation therefore means here an increase in the amount of paper receipts that are not backed by gold yet masquerade as true representatives of money proper, gold. Again the holder of unbacked money can now engage in an exchange of nothing for something. In the modern world the money proper is no longer gold but rather paper money hence inflation in this case is purely the increase in the stock of paper money. Please note we don't say as monetarists are saying (sic) that the increase in the money supply causes inflation. What we are saying is that inflation is the increase in the money supply. -Austrian School monetarist, Frank Shostak Money is Debt and Debt is Money, or Money = Debt and Debt =Money http://www.moneyasdebt.net/ Congressman Patman: "How did you get the money to buy those two billion dollars worth of Government securities in 1933?" Governor Eccles: "Out of the right to issue credit money." Patman: "And there is nothing behind it, is there, except our Government's credit?" Eccles: "That is what our money system is. If there were no debts in our money system, there wouldn't be any money." Congressman Fletcher: "Chairman Eccles, when do you think there is a possibility of returning to a free and open market, instead of this pegged and artificially controlled financial market we now have?" Governor Eccles: "Never, not in your lifetime or mine." -Hearings of the House Committee on Banking and Currency, September 30, 1941 http://www.archives.gov/research/guide-fed-records/groups/233.html On this day in 1833, President Andrew Jackson announces that the government will no longer use the Second Bank of the United States, the country's national bank. He then used his executive power to remove all federal funds from the bank, in the final salvo of what is referred to as the "Bank War." On September 10, 1833, Jackson removed all federal funds from the Second Bank of the U.S., redistributing them to various state banks, which were popularly known as "pet banks." In addition, he announced that deposits to the bank would not be accepted after October 1. Finally, Jackson had succeeded in destroying the bank; its charter officially expired in 1836. http://www.history.com/this-day-in-history/andrew-jackson-shuts-down-second-bank-of-the-us First National Bank of Montgomery v. Jerome Daly An attorney named Jerome Daly was a defendant in a civil case in Credit River Township, Scott County, Minnesota, heard on December 9, 1968. The plaintiff was the First National Bank of Montgomery, which had foreclosed on Daly's property for nonpayment of the mortgage, and was seeking to evict him from the property. Daly based his defense on the argument that the bank had not actually loaned him any money but had simply created credit on its books. Daly argued that the bank had thus not given him anything of value and was not entitled to the property that secured the loan. The jury and the justice of the peace, Martin V. Mahoney, agreed with this argument. The jury returned a verdict for the defendant, and the Justice of the Peace declared that the mortgage was "null and void" and that the bank was not entitled to possession of the property.[1][2] The Justice admitted in his order that his decision might run counter to provisions in the Minnesota Constitution and some Minnesota statutes, but contended that such provisions were "repugnant" to the Constitution of the United States and the Bill of Rights in the Minnesota Constitution. http://en.wikipedia.org/wiki/First_National_Bank_of_Montgomery_v._Jerome_Daly