GATA claimed the letter was not the first admission of the Fed making gold swaps but that "it comes at a sensitive time in the currency and gold markets." According to a GATA news release, "The U.S. dollar is showing unprecedented weakness, the gold price is showing unprecedented strength, Western European central banks appear to be withdrawing from gold sales and leasing, and the International Monetary Fund is being pressed to take the lead in the gold price suppression scheme by selling gold from its own supposed reserves in the guise of providing financial support for poor nations."
It is now expected that a lawsuit will be filed in federal court to appeal the Fed's denial of GATA's freedom-of- information request concerning gold swaps. Those people stocking up on gold for safekeeping might keep in mind that gold and silver—in fact, just about anything considered a financial asset—may be seized by federal authorities in wartime or any officially declared "emergency." Those who hoard gold against the possible devaluation or collapse of the dollar might remember that during the Great Depression, the hoarding and use of gold as a medium of exchange was outlawed.
According to the GATA website, government confiscation of gold has never been a serious or imminent threat, but in any "emergency," this could swiftly change. "While the U.S. Government in 1933 did demand the exchange of circulating government-issued coins for paper money (proceeding to devalue the paper money after the gold was surrendered), that gold then was a huge part of the country's money supply, and amid the national economic collapse at that time the government could make a plausible complaint against 'hoarding.' There are no such circumstances today, gold no longer being in general circulation as currency.. But of course lately the arrogance and imperiousness of the U.S. government have far exceeded even the paranoia of precious metals investors. Certainly capital controls may be imposed in the United States in the next currency crisis, and it's not far from capital controls to even more brutal interventions in the economy."
Such concern intensified with a 2005 letter to GATA in which the former chief counsel for the Treasury Department's Office of Foreign Assets Control, Sean M. Thornton, explained the scope of the government's power in making financial seizures. "It took GATA six months and a little prodding to get answers from the Treasury, but the Treasury's reply, when it came, was remarkably comprehensive and candid.
"The government's authority to interfere with the ownership of gold, silver, and mining shares arises...from the Trading with the Enemy Act, which became law in 1917 during World War I and applies during declared wars, and from 1977's International Emergency Economic Powers Act, which can be applied without declared wars.
"While the Trading with the Enemy Act authorizes the government to interfere with the ownership of gold and silver particularly, it also applies to all forms of currency and all securities. So the Treasury official stressed that it could be applied not just to shares of gold and silver mining companies but to the shares of all companies in which there is a foreign ownership interest. Further, there is no requirement in the law that the targets of the government's interference must have some connection to the declared enemies of the United States, or, really, some connection to foreign ownership. Anything that can be construed as a financial instrument, no matter how innocently it has been used, is subject to seizure under the Trading with the Enemy Act and the International Emergency Economic Powers Act."
"Usury' is a term that has all but disappeared from our language. Once, "usury" was defined as any interest charged for a loan, but modern dictionaries softened this definition to merely "excessive" interest. The Texas Constitution once defined "usury" as any interest in excess of 6 percent. This ceiling was increased over the years until the whole concept was deleted.
Those who know the Bible recall that Jesus was crucified by those in power for chasing "money changers" out of the temple. Public anger today is being directed at the financial moguls of both Wall Street and Washington, D.C.
"Charging interest on pretended loans is usury, and that has become institutionalized under the Federal Reserve System," argued G. Edward Griffin, author of The Creature from Jekyll Island. This has been accomplished by masking the operations of the Fed in secrecy and arcane economic terms. "The.mechanism by which the Fed converts debt into money may seem complicated at first, but it is simple if one remembers that the process is not intended to be logical but to confuse and deceive," Griffin added.
Former Washington Post editor William Greider wrote, "The details of [the Fed's] actions were presumed to be too esoteric for ordinary citizens to understand." Some believe this ignorance may be a blessing. Henry Ford was quoted as saying, "It is well enough that the people of the nation do not understand our banking and monetary system for, if they did, I believe there would be a revolution before tomorrow morning."
"Most Americans have no real understanding of the operation of the international moneylenders," stated the late senator Barry Goldwater.
"The bankers want it that way. We recognize in a hazy sort of way that the Rothschilds and the Warburgs of Europe and the houses of J. P. Morgan, Kuhn, Loeb and Company, Schiff, Lehman and Rockefeller possess and control vast wealth. How they acquire this vast financial power and employ it is a mystery to most of us. International bankers make money by extending credit to governments. The greater the debt of the political state, the larger the interest returned to the lenders. The national banks of Europe are actually owned and controlled by private interests." These same "private interests" now own and control the Federal Reserve System.
MONEY FOR FAITH AND DEBT
According to William Greider, the Fed has assumed a cult-like power: "To modern minds, it seemed bizarre to think of the Federal Reserve as a religious institution.. Yet the conspiracy theorists, in their own demented way, were on to something real and significant.. [The Fed] did also function in the realm of religion. Its mysterious powers of money creation, inherited from priestly forebears, shielded a complex bundle of social and psychological meanings. With its own form of secret incantation, the Federal Reserve presided over awesome social ritual, transactions so powerful and frightening they seemed to lie beyond common understanding..
"Above all, money was a function of faith. It required implicit and universal social consent that was indeed mysterious. To create money and use it, each one must believe and everyone must believe. Only then did worthless pieces of paper take on value."
Money today is increasingly mere electronic blips in a computer accessed by plastic cards at ATMs. There is nothing to back it up. As money is loaned at interest by great institutions, its worth decreases as more and more of it comes into existence. This is called inflation, which in some ways is a built-in tax on the use of money. And inflation can be manipulated upward or downward by those who control the flow of money, whether it be through paper or the electronic blips.
"The result of this whole system is massive debt at every level of society today," wrote author William Bramley. "The banks are in debt to the depositors, and the depositors' money is loaned out and creates indebtedness to the banks. Making this system even more akin to something out of a maniac's delirium is the fact that banks, like other lenders, often have the right to seize physical property if its paper money is not repaid."
THE FEDERAL RESERVE ANOMALY
In America the bankers of the Federal Reserve System have the greatest control of the nation's money. Because the Fed is at the center of U.S. monetary policy control, it has become the central bank of the United States. By changing the supply of money in circulation, the Fed influences interest rates, which in turn affects millions of families' mortgage payments. It also can cause financial markets to boom or collapse and the economy to expand or contract into recession.
The Fed is "the crucial anomaly at the very core of representative democracy, an uncomfortable contradiction with the civic mythology of self-government," wrote William Greider. His 1987 book Secrets of the Temple: Howthe Federal Reserve Runs the Country disparages "nativist conspiracy theories" yet presents an eloquent conspiracy argument for the Fed's control.
Consider that a paper bill is simply a promissory note to be traded at some point for something of value. It thus makes sense to perceive paper money as valuable as real goods or services. This viewpoint worked well before the invention of interest. The early goldsmiths in Europe who warehoused gold coins used their stockpiles as the basis for issuing paper money. Since it was highly unlikely that everyone would demand their gold back at the same time, the smiths became bankers, loaning out a portion of their stockpile at interest for profit. This practice—loaning the greater portion of wealth while retaining only a small fraction for emergencies—became known as fractional reserve, or fractional banking. This system worked well until everyone suddenly wanted their deposits back and started a "run" on the bank. Bank runs, or depositors demanding their money back all at one time, were a major cause of financial damage during the Great Depression of the 1930s. But runs are not just history. In early 2008, Northern Rock Bank, the fifth-largest bank in the United Kingdom, was nationalized by the government due to financial problems created by the subprime mortgage crisis and a run on its branch banks.
After the invention of fractional banking came the implementation of "fiat" money—intrinsically worthless paper money made valuable by law or decree of government. An early example of this system was recorded by Marco Polo during his visit to China in 1275. Polo noted the emperor forced his people to accept black pieces of paper with an official seal on them as legal money under pain of imprisonment or death. The emperor then used this fiat money to pay all his foreign debts.
"One is tempted to marvel at the [emperor's] audacious power and the subservience of his subjects who endured such an outrage," wrote G. Edward Griffin, "but our smugness rapidly vanishes when we consider the similarity of our own Federal Reserve Notes. They are adorned with signatures and seals; counterfeiters are severely punished; the government pays its expenses with them; the population is forced to accept them; they—and the 'invisible' checkbook money into which they can be converted—are made in such vast quantity that it must be equal in amount to all the treasures of the world. And yet they cost nothing to make. In truth, our present monetary system is an almost exact replica of that which supported the warlords of seven centuries ago."
Nowhere was the art of making money out of money more developed than in the ancient Khazar Empire, which evolved from nomadic raider-clans operating on the east- west caravan routes in the Caucasus Mountain region north of Iraq and between the Black Sea and Caspian Sea. By the tenth century, the Khazars had created a wealthy empire that stretched from north of the Black Sea to the Ural Mountains and west of the Caspian Sea to the Dnieper River.
The warlords of the Khazars thought that exchanging and loaning money would be more profitable and less hazardous than raiding caravans. There was one problem. The Khazar Empire was almost evenly divided among Christians, Muslims, and Jews. Both Christians and Muslims believed that charging interest on a loan, then called usury, was a sin. Only Jews could openly charge interest on loans. Whether they did it out of pragmatism or actual religiosity, the Khazar aristocrats professed a conversion to Judaism. According to the Random House Encyclopedia, "Some scholars believe they [the Khazars] are the progenitors of many Eastern European Jews." This would include the renowned Rothschild family, who financially ruled Europe for more than a century. Conspiracy researchers claim they still dominate the world financial order and have been the financial backers of the Rockefellers and other wealthy families. It might be noted that none of these converted Khazarians had any connection whatsoever to Palestine, yet these were among the Russian progenitors of the political movement known as Zionism.
The 1917 Balfour Declaration, a statement by British foreign secretary Alfred Balfour that guaranteed a Jewish home in Palestine and was later approved as a mandate by the League of Nations, is acknowledged as the foundation for the creation of the state of Israel. This letter originally was a reply to a leading Zionist, Baron Walter Rothschild, the first unconverted Jewish peer in England's House of Lords.
The money-management methods of the Rothschild banking dynasty have been emulated for decades by the globalist financiers, whether Jewish or otherwise. One key component of this management is secrecy. Utilizing bought-off politicians, who catch the public rage and scrutiny, major globalists are able to operate out of the public eye almost with impunity. Derek Wilson, who chronicled the Rothschild empire in his 1988 book Rothschild: The Wealth and Power of a Dynasty, wrote, "Even when, in later years, some of them [Rothschilds] entered parliament, they did not feature prominently in the assembly chambers of London, Paris or Berlin. Yet all the while they were helping to shape the major events of the day: by granting or withholding funds; by providing statesmen with an official diplomatic service; by influencing appointments to high office; and by an almost daily intercourse with the great decision makers."
The invention of the printing press, which allowed for the printing of paper money as well as the Bible, led to the Age of Enlightenment and the decline of the Roman Church. Money replaced religion as the new control mechanism of the wealthy elite. And despite the popular myth, the American colonial revolt against England occurred more over concern for its own currency than a small tax on tea. Benjamin Franklin wrote, ".the inability of the colonists to get the power to issue their own money permanently out of the hands of George III and the international bankers was the prime reason for the Revolutionary War." As previously discussed, wealth equals power. And the American revolutionists knew that to gain true freedom, they had to break the power of the Rothschild-dominated Bank of England, which had outlawed their money—colonial script.
Once America's freedom was secured, Founding Fathers Thomas Jefferson and Alexander Hamilton began arguing over whether or not to adopt a central bank. Hamilton believed in a strong central government with a central bank overseen by a wealthy elite. "No society could succeed which did not unite the interest and credit of rich individuals with those of the state," Hamilton wrote. Supporters of Hamilton's elitism formed America's first political party, the Federalists. Hamilton, once described as a "tool of the international bankers," argued that "A national debt, if it is not excessive, will be to us a national blessing. It will be a powerful cement to our nation. It will also create a necessity for keeping up taxation to a degree which, without being oppressive, will be a spur to industry."
America's first central bank, the Bank of North America, was created in 1781 by Continental congressman Robert Morris, who modeled the bank after the Bank of England. The bank was formed before the Constitution was drafted and was wrought with fraud and plagued by inflation caused by the creation of baseless "fiat" currency. The bank lasted for three years. Morris's former aide, Alexander Hamilton, became secretary of the Treasury and in 1791 headed the next attempt at a central bank by establishing the First Bank of the United States. He was strongly opposed by Jefferson and his followers. In 1811, the charter of the First Bank of the United States was not renewed.
Jefferson knew from British and European history that a central bank trading on interest could quickly become the master of a nation, noting to John Taylor in 1816 that ".the other nations of Europe have tried and trodden every path of force or folly in fruitless quest of the same object, yet we still expect to find in juggling tricks and banking dreams, that money can be made out of nothing.. [B]anking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." Jefferson added, "Already they have raised up a money aristocracy.. The issuing power should be taken from the banks and restored to the people to whom it properly belongs."
Jefferson believed that instituting a central bank would be unconstitutional. "I consider the foundation of the Constitution as laid on this ground [enshrined in the Tenth Amendment]: That 'all powers not delegated to the United States, by the Constitution, nor prohibited by it to the States, are reserved to the States or to the people.' To take a single step beyond the boundaries thus specially drawn around the powers of Congress, is to take possession of a boundless field of power, no longer susceptible of any definition. The incorporation of a bank, and the powers assumed by this bill, have not, in my opinion, been delegated to the United States, by the Constitution."
Despite Jefferson's lobbying, the financial chaos that resulted from the War of 1812 prompted Congress to issue a twenty-year charter to the Second Bank of the United States in 1816. Andrew Jackson, the first president from west of the Appalachian Mountains, denounced the central bank as unconstitutional and as "a curse to a republic; inasmuch as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country." This central bank ended in 1836, after President Jackson vetoed a congressional bill to extend its charter.
Much to bankers' dismay, Jackson fully eliminated the national debt by the end of his two terms as president. It was probably no coincidence that America's first assassination attempt was made on Jackson by a man named Richard Lawrence, a man who claimed to be in touch with "the powers in Europe," who had promised to intervene if any attempt was made to punish him. Lawrence was a painter, and many speculate that at the time the lead in his paints had caused him to become mentally unbalanced and fancy himself the rightful king of England. After stalking Jackson for several weeks, on January 30, 1835, a particularly humid day, he approached the president coming from a funeral. Stepping suddenly from behind a pillar, Lawrence pulled two pistols but both misfired, most likely due to damp powder. Lawrence was swiftly wrestled to the ground by onlookers, including Congressman Davy Crockett aided by Jackson. At his trial, Lawrence was prosecuted by Francis Scott Key, author of "The Star-Spangled Banner." The jury took only five minutes to find Lawrence insane and he spent the rest of his life in mental institutions, dying in 1861. Although many persons, including Jackson, believed Lawrence was part of a larger conspiracy, at the time there was no evidence to prove whether he was merely a lone-nut assassin or an early-day patsy somehow manipulated into attacking Jackson, an implacable enemy of the international bankers. However, it might be worth noting that in two successful presidential assassinations—those of Abraham Lincoln and John F. Kennedy—both men were attempting to thwart the international bankers—Lincoln by issuing his own money, greenbacks, and Kennedy in bypassing the Fed with U.S. notes in 1963.
"While most people understand what took place when the American Revolution was fought, many are not aware of the permanent financial revolution that [was] being fought over the world's monetary system since 1694 when the Bank of England was created," explained international reporter Joan Veon. "At that time, a group of private individuals decided that they could make a great deal of money if they changed the laws of the land to shift control of the country's finances from the government to them. The Bank of England, which is England's 'central bank,' is a private corporation which earns a continuous stream of income when the British government borrows from them to run the country. England was the ingenious country that recognized they could run the world's finances if they established private corporations in all the countries of the world. The combined debt of all the world's country's [s/c] would create an income stream of unbelievable amounts. In 1913, Congress passed the Federal Reserve Act creating our central bank. Most Americans don't know that this organization is a private corporation established to control America's monetary system through the banking industry."
Other attempts were made to resurrect a central bank in America but none succeeded until the creation of the Federal Reserve System at the hands of a well- documented conspiracy. "The situation we are confronted with did not happen in the last few years, but began in 1913 when a group of cunningly deceitful legislators passed the Federal Reserve Act on December 24 at 11:45 p.m., after those who were opposed went home for Christmas," Veon noted.
"|T|here was an occasion near the close of 1910, when I was as secretive, indeed, as furtive as any conspirator.... I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System...," wrote Frank A. Vanderlip, one of the men who created the Fed. He went on to become president of New York's National City Bank, a forebear of today's Citibank.
What Vanderlip was referring to was a secretive trip on the night of November 22,1910, by seven men who perhaps held as much as one-fourth of the world's wealth. Jekyll Island was J. P. Morgan's fashionable hunting retreat off the coast of Georgia, and the men went under secrecy so strict that they only used first names when addressing one another and brought in new servants who were unaware of their identities.
During their week on Jekyll Island, the men worked on a plan for a banking reform that the government deemed necessary after a series of financial panics in 1879,1893, and 1907. In fact, Princeton University president and future U.S. president Woodrow Wilson proclaimed that the solution to the financial panics laid in the appointment of "a committee of six or seven public-spirited men like J. P. Morgan to handle the affairs of our country." Cries arose for a stable national system that could regulate banking and prevent crises and panics. Today, many researchers believe these panics were artificially created as a pretext for the "reforms."
The seven men were Vanderlip, who represented
William Rockefeller and Jacob Schiff s investment firm of Kuhn, Loeb & Company; Assistant Secretary of the Treasury Abraham Piatt Andrew; senior partner of J. P. Morgan Company Henry P. Davison; First National Bank of NewYork (a Morgan-dominated institution) president Charles D. Norton; Morgan lieutenant Benjamin Strong; Kuhn, Loeb & Company partner Paul Moritz Warburg; and Rhode Island Republican senator Nelson W. Aldrich. Though Aldrich was not technically a banker, he was an associate of J. P. Morgan. He was also the father-in-law of JohnD. Rockefeller Jr. Paul Warburg, an original founder of the Council on Foreign Relations, was the brother of Max Warburg, chief of the Μ. M. Warburg Company banking consortium in Germany and the Netherlands. In just a few years, Max Warburg would aid Lenin in crossing wartime Germany to found communism in Russia.