by Phillyguy for the Saker blog
The US came out of WWII as the world’s dominant military and economic power. Since that time, US hegemony has been predicated on: 1) unrivaled military strength, 2) control of world’s energy reserves and 3) primacy of the US dollar.
US dominance has become increasingly threatened due to its continuing economic decline, a process that began in the mid-1970s as US corporate profits began to stagnate/decline in response to increasing competition from rebuilt economies in Europe- primarily Germany (Marshall Plan), Japan (Korea and Vietnam wars) and more recently China. The structural economic problems confronting the US and western capitalism were vividly on display during the 2008 financial collapse, which has still not been resolved. While US military power is still formidable, it is being tested by Russia (exemplified by their success in Syria) and the rapid development of Chinese and Iranian militaries. Further, the status of the US dollar as the worlds reserved currency is being increasingly challenged by the Chinese yuan as well as Bitcoin and other Cryptocurrencies. The US response to these events has been an increasingly bellicose, aggressive and astronomically expensive foreign policy, coupled with growing use of economic sanctions (aka economic warfare) against real or perceived adversaries which include Russia, Iran, Venezuela and North Korea.
On September 11, 2001, the US suffered the most lethal attack in the nation’s history. According to the “official” narrative, on that fateful Tuesday, nineteen hijackers affiliated with the radical Islamic group al-Qaeda hijacked four jet aircraft. Two of these aircraft, AA Flight 11 and United Flight 175 crashed into the World Trade Center (WTC) in NYC, while AA Flight 77 crashed into the Pentagon and United Flight 93 crashed into an empty field in Shanksville, PA . I would like to stress that 16 years on, there are still multiple outstanding questions about 911, including what did the intelligence community- FBI and CIA know about the hijackers prior to that date, what caused the planes to crash and why did the WTC towers collapse [2, 3]? The tragic events of 911 resulted in the death or circa 3000 Americans, and played a key role in shaping US foreign policy for the early 21st century. Indeed, 911 set the stage for US military engagements, currently stretching from the Levant, to Caspian Basin, Persian Gulf, South-Central Asia, China Sea, Indian Ocean, Horn of Africa, the Maghreb, to Eastern Europe and Russian border. While much has been written about geopolitical ramifications of ongoing conflicts in the Middle East and South-Central Asia, the direct costs of these conflict to American taxpayers has received far less attention. In this piece we will focus on the costs arising from two of these conflicts- Afghanistan and Iraq and their long term implications.
War in Afghanistan
Less than a month following the 911 attacks, President GW Bush announced operation “Enduring Freedom”, with an initial deployment of approximately 1000 troops to Afghanistan with the goal of tracking down al-Qaeda leader Osama bin Laden, the alleged “mastermind” behind 911. Since the initial troop deployment, the war in Afghanistan has become the longest running war in US history, with 11,000 US troops still deployed [4, 5]. Afghanistan now has the dubious distinction of being the world’s leading heroin supplier. Cost to taxpayers currently exceeds $1 trillion [6, 7], possibly going as high as $2 trillion . It is not clear when this war will end, as President Trump announced last summer that 4000 additional US troops would be sent to Afghanistan .
War in Iraq
In 2002, reporters Michael Gordon and Judith Miller published a story in the paper of record (NY Times), alleging that Saddam Hussein was embarking on a program to develop weapons of mass destruction (WMDs) . Although later found to be inaccurate, this piece was used by then Secretary of State Colin Powell in his now infamous 2003 UN speech as a casus belli for the subsequent US invasion of Iraq. Powell later stated that his U.N. Speech “Was a Great Intelligence Failure” . At the time of the US invasion, then Defense Secretary Donald Rumsfeld estimated the cost of the Iraq war would be relatively cheap, $20-50 billion, largely paid for using revenue obtained from Iraqi oil sales. As it became rapidly apparent, the US war in Iraq would be neither brief nor inexpensive . In 2008, costs of the Iraq war were estimated to be $3 trillion , ultimately costing US taxpayers $5 trillion or more [14, 15]. Thousands of US troops are still deployed in Iraq in 2017.
The Federal government is faced with daunting economic problems which have been greatly exacerbated by multiple tax cuts for the wealthy and increased spending on the military. Congress recently approved a $700 billion military appropriation and is now considering a large tax cut mainly benefiting wealthy Americans . In the past, the cost of wars were paid for by increasing taxes- Lyndon Johnson place a 10% surtax on federal income tax to help pay for the war in Vietnam. In contrast, the wars in Afghanistan and Iraq have been largely financed “off-budget” using borrowed money (i.e., bonds), which is adding more debt to already large federal deficits- the debt limit will soon have to be raised to $20 trillion. This situation can only go on as long as the US dollar maintains its value and foreigners are willing to purchase US T bills. Further, one could argue that in addition to being astronomically expensive and jeopardizing American financial stability, the wars in Afghanistan and Iraq have been detrimental to the long term strategic interests of the US, while at the same time strengthening the positions of Russia, Iran and China.
1. September 11th Terror Attacks Fast Facts CNN Library Aug 24, 2017; Link: http://www.cnn.com/2013/07/27/us/september-11-anniversary-fast-facts/index.html
2. The 10 unanswered questions of 9/11. by Will Bunch Philadelphia Inquirer Sept. 6, 2011; Link: www.philly.com/philly/blogs/attytood/The-10-unanswered-questions-of-911.html
3. Loose Change 9/11: A Documentary Film About September 11th; Link: www.loosechange911.com
4. Timeline: US intervention in Afghanistan 2001 to 2017 22 Aug 2017; Link: www.aljazeera.com/news/2017/
5. U.S. Military Reveals True, Higher Number of Troops in Afghanistan, but Hides Iraq and Syria Counts By Tom O’Connor Newsweek Aug 30, 2017. Link: www.newsweek.com/us-troops-
6. Washington’s Twenty-First-Century Opium Wars by Alfred McCoyFeb 21, 2016; Link:www.tomdispatch.com/post/ 176106/tomgram%3A_alfred_ mccoy,_washington%27s_twenty- first-century_opium_wars
7. Into the Afghan Abyss (Again)- How a failed drug war will defeat Trump’s Afghan again. By Alfred W. McCoy Sun, Nov, 12, 2017; Link: www.commondreams.org/views/2017/11/12/afghan-abyss-again
8. The financial cost of 16 years in Afghanistan by Jeanne Sahadi CNN Money Aug 22, 2017; Link: money.cnn.com/2017/08/21/news/
9. Trump will send 4,000 more troops to Afghanistan: report By Bob Fredericks NY Post Aug 21, 2017; Link: nypost.com/2017/08/21/trump-
10. Threats and Responses: The Iraqis; U.S. Says Hussein Intensifies Quest For A-Bomb Parts. By Michael R. Gordon and Judith Miller NY Times Sept. 8, 2002; Link: www.nytimes.com/2002/09/08/
11. Colin Powell: U.N. Speech “Was a Great Intelligence Failure” by Jason M. Breslow May 17, 2016; Link: www.pbs.org/wgbh/frontline/
12. Estimates of Iraq War Cost Were Not Close to Ballpark By David M. Herszenhorn NY Times Mar 19, 2008; Link: www.nytimes.com/2008/03/19/
13. The true cost of the Iraq war: $3 trillion and beyond By Joseph E. Stiglitz and Linda J. Bilmes Washington Post Sun, Sept 5, 2010; Link: www.washingtonpost.com/wp- dyn/content/article/2010/09/ 03/AR2010090302200.html
14. Cost of War project Brown University (2016); Link: watson.brown.edu/costsofwar/
15. Cost of Iraq War: Timeline, Economic Impact- the Ongoing Costs of the Iraq War By Kimberly Amadeo June 27, 2017; Link: www.thebalance.com/cost-of-
16. How an unequal tax cut grew more unequal. By Heather Long Washington Post Dec 2, 2017; Link: www.washingtonpost.com/
‘Although later found to be inaccurate, this piece was used by then Secretary of State Colin Powell in his now infamous 2003 UN speech as a casus belli for the subsequent US invasion of Iraq’.
No. Try “a pack of deliberate lies”.
‘Powell later stated that his U.N. Speech “Was a Great Intelligence Failure”’.
No. Another pack pf deliberate lies. If- which I doubt – Powell was deceived by them, more fool he.
unfortunately the ” lies “are continuing as if nothing happened –
Well sure it is strategic failure.
But it is deliberate strategy.
It is proven fact.
One should only listen General Wesley Clark statements about the plan for wars in ME after 9/11.
Or read about the so called Wolfowitz doctrine after the fall of USSR.
As a top US leader and with his top echelon military background, it seems ridiculous and highly unlikely for someone like Powell to be played with about war propaganda…
Anyway. Powell is posturing as humiliated idiot and unconditional patsy. How very brave he is…
To further the point.
Who could be so gullible as to believe that Haley or Powell were played with.
Do intelligence community feed Haley with lies as well ?
Powell is ridiculous.
At very least he should man up and defend what he stand for. Wolfowitz is much more respectable.
It’s not just taxation and debt. Inflation of the money supply is another way they are paying for their wars.
And inflation is taxation, as a US congress exchange between representative Ron Paul and then Fed chair Bernanke showed.
Just trying to make sense of that $3T burnt through in Iraq. It says here that Iraq today receives about $80Gpa from oil sales, owns all its oil, and this is about 95% of Iraq’s revenue. So, in the 14 years since Operation Enduring Freedom, the USA has spent around $3,000G and Iraq has earned around $1,000G. Under Saddam Hussein, Iraq would have earned less because the war in the ME sent oil prices through the roof — say, doubled. Does this mean that the USA spent $3,000G of its own money, and killed 4,000 of its own soldiers just so that Iraq could earn an extra $500G since 911? That does not add up. Where have I gone wrong?
The Midnight Oil Transport Company enjoyed handsome profits dealing in Iragi oil directly the war was over. And, even though the flow gauges at the terminals didn’t work, the ships got loaded anyway.
And, speaking of sweetheart deals, there were oil tankers named after Condoleeza Rice and Carla Hills.
@Phil. So the people of the USA paid $3T for the Midnight Oil Co to fill up tankers named CondoLiza Rice after the war? You describe the company’s postwar profits as “handsome”; how do they stack up against $3T spent by that nebulous entity known as “the USA” to wage the war that made the handsome profits for Midnight Co? The figures don’t add up: $3,000G spent by “the USA”; profits recorded so far, only $500G extra revenue for Iraq plus $handsome for Midnight Cowboy. Even if $handsome is the same as what Iraq made from the war the sum is only one thousand billion profit for those two parties: where did the extra two thousand billion dollars go?
Excerpt: “This situation can only go on as long as the US dollar maintains its value and foreigners are willing to purchase US T bills. ”
Actually, the US Treasury Dept has been using off-book funds for some time to purchase hundreds of billions of $ of Treasuries that have and are being dumped by foreign governments. The funds come from the Exchange Stabilization Fund (ESF), for an explanation see https://solari.com/blog/the-exchange-stabilization-fund-with-rob-kirby/ The ESF has trillions of dollars at its disposal, which are used to manipulate all bond, equity, and precious metal markets, among other things.
In other words, foreign purchases are not necessary. What is required to end this system is a loss of confidence in the dollar, as well a refusal to accept it for goods and services. This is in progress. The question is whether it will inevitably result in nuclear war.
And the ESF is operated out of the NYFRB. “ESF operations are conducted through the Federal Reserve Bank of New York in its capacity as fiscal agent for the Treasury.” https://www.newyorkfed.org/aboutthefed/fedpoint/fed14.html
The US can support the value of treasuries at any level they wish. The US dollar is controlled in US markets. The problems arise when foreign governments decide to dump dollars, and convert to something like gold, of which there isn’t enough. This could be controlled in US markets, but not overseas. And so some kind of divergence will develop, as the US can’t for example control Shanghai and other markets..
Can anyone here explain what a SCALAR weapon is?
Moderator Note: You may want to start by exploring a link such as this https://duckduckgo.com/?q=scalar+weapons&t=ffsb&ia=web. Respectfully, Moderator J
“In contrast, the wars in Afghanistan and Iraq have been largely financed “off-budget” using borrowed money (i.e., bonds), which is adding more debt to already large federal deficits- the debt limit will soon have to be raised to $20 trillion.”
Actually, not. Check the Treasury statements, you will find no such entries. In today’s post-Bretton Woods currency regime, all purchases are made simply with computer entries to accounts. (See Bernanke explaining this: https://www.youtube.com/watch?v=U_bjDAZazWU).
The UW is the sovereign issuer of its own currency. It does not borrow it from anyone whatsoever and so it does not owe it to anyone. This very simple and verifiable fact seems to escape almost everyone in the political sphere, let alone the the media. The “debt-ceiling” is nothing other than a reflection of political ignorance of the actual workings of our money system.
Yes, the fiat regimen does create money “out of thin air.” This fiat regimen is the same for all nations that are sovereign in their currency. Exceptions are the nations who are users of the Euro, and those who peg their currencies to the dollar. Sovereign currencies are not exchangeable for specie and they therefore “free float” on the exchange markets (Forex).
The distinction is crucial: issuers of the currency and users of the currency (the private sector and the several US states). The banks are also issuers of currency in the form of credit (loans create deposits–credits in the accounts–and not inversely, as popularly believed. They are effectively agents of the sovereign issuer. At all events, no money is ever created in the private sector, only sellable products and services are created or offered in the marketplace. The gov’t is the exclusive (monopoly) issuer of the US dollar. The value of the dollar is due to the fact that only US dollars are accepted as payment of federal taxes. Taxpayers earn dollars through their productivity. They sell their services either directly to the gov’t, which then credits their accounts by using computers–data entry–or by selling to other private entities, so that the banks credit their accounts similarly by using computer data entry.
It follows, as Bernanke explained, that the gov’t does not “need” taxpayer’s money to spend. The idea is actually ludicrous, since why would the gov’t need that which it originally issued? The entire amount of the federal deficit represents–to the money–the amount which has been spent into the private economy, whether domestic or foreign. It is simply one side of the ledger. The other side, the assets, are the same monies in possession of the private sectors that have sold their products and services.
Taxes therefore serve to give value to the currency, and also serve political purposes. Taxes can be structured to make for an equitable distribution or they can serve the interests of a plutocracy. In any case, they are not used or “needed” by the gov’t to serve the public good, such as welfare payments.
It also follows that the gov’t cannot “run out of money,” as Obama once said. It would be like saying that the scoreboard at a basketball game could “run out of numbers.” This does not mean, however, that the gov’t can spend without limit. The currency issues must correspond to the productive power of the country. It makes no sense to issue currency if there an absence of productive labor and productive capacity. Of course, money can be spent intelligently as with spending for infrastructure, which improves a country’s productive power; or it can be spent stupidly, as when it is spent on keeping “too big to fail” banks in business or on a mega-bloated “defense” and “security” complex.
The idea of “debt-free money” is a non sequitur, as is explained by R. Wray:
“The Cloakroom Debt Token”
“In discussing money, G.F. Knapp (one of the developers of the State Money Approach, adopted by Keynes and by MMT) made a useful analogy with the cloakroom token. When you drop off your coat at the cloakroom, the attendant offers you a token, usually with an identification number. The token is evidence of the debt of the cloakroom, which owes you a coat.
Some hours later you return with the token. The attendant returns your coat. If you feel generous, you tip the attendant for the service.
By accepting the token and meeting the obligation to return your coat, the attendant has “redeemed” herself or himself. The slate is wiped clean. The debt is destroyed.
At this point the token is simply warehoused, put back on an empty coat-hanger, waiting to be reused.
When the token is in the cloakroom, it is not a debt. It is a circular piece of cardboard, perhaps enclosed in a metal ring.
Or maybe it is a square chunk of plastic.
Or a shiny brass coin.
Some cloakrooms instead use paper tickets, split into stock and stub at the time a coat is deposited. On your return to the cloakroom, the stock and stub are matched, the coat is returned to the rightful owner, and the stock and stub are thrown away.
It makes no difference what form the token takes—it is just evidence of a debt, a “coat debt” that is redeemed by return of the coat.
Note that you could pass the token to your spouse or even to a stranger, with instruction to fetch your coat from the cloakroom.
If coats were homogeneous, the tokens would be valuable to anyone who might want your coat. They could become a sort of currency passing from hand-to-hand at the value of a coat debt, so Knapp’s analogy is not so far-fetched as it might first appear.
However, coats are not uniform, and the attendant cannot simply return “a coat”, but must return “your coat” in redemption for the token.
Dry cleaners also use tokens, but they make an additional promise. Not only will they return your coat, but they also will clean it. They cannot redeem their debts simply by returning your dirty coat.
Ditto the seamstress, who redeems her token debt by returning your coat with sleeves shortened.
The point here is that the token is representative of debt, with the specific obligation spelled out by custom or contract and enforced if necessary in the courts.”
Regarding Treasury bills and bonds, these accounts at the Fed are basically checking and saving accounts. If the Chinese sell something in the US, they are free to deposit their earnings at the Fed so as to earn interest. They are always free to remove the funds to spend elsewhere. Tbills and bonds are entirely liquid. The US doesn’t “need” these deposits, and the interest on them is paid quite simply with computer entries. There is never a problem with defaulting on such payments, since, to repeat, the US cannot “run out” of money. Nor can any other sovereign issuer of its own currency.
Regarding bond sales, that is a bit more complex, and relates to banking operations. The gov’t does not sell bonds to “get” dollars to spend. Only the several states, who are users of the dollar have to do that to fund their operations. It isn’t necessary to understand all these technicalities to understand the essentials of our monetary system. But see the reading suggestion:
The daily US Treasury statement is here:
@Harold. “The gov’t is the exclusive (monopoly) issuer of the US dollar.” The last I heard, it was a private bank — the Fed — which has the monopoly on printing a fresh batch of dollars; and the gov’t buys these new dollars on hire-purchase at x% interest from the bankers who own the Fed. Is this not true, then? (All I know is what I view on the web).
Most money in the US is actually created by private banks as loans for asset/property transfers, eg mortgage loans.
And who owns these private banks? Same network as own the FED. Whatever method is used to issue fiat credit (aka Fresh Dollars) from the US banking network, the USA (ie Joe and Mary Shmoe in their millions) pay interest on those new dollars (aka Credit). “I care not what lawmakers are elected in the USA, so long as my banks issue the credit” — Meyer Rothschild, founder of House of Rothschild currently trading as JP Morgan & Co (inter alia).
The essentials of our monetary system are this. The government makes it illegal not to accept its fiat currency in exchange for all goods and services, and it has the ability to create as much fiat as it wishes. Fiat currencies are no longer tied to gold or silver, they are strictly debt-based “promise to pay”. They are not tied to gold or silver, there are no limits and no enforcement of any laws to limit the creation of infinite supply/debt. Sometime in the distant past, there was some balance using “sterilized” purchases of Treasuries by retiring old notes when new notes were created, but that is history.
In the US, the Exchange Stabilization Fund uses/creates trillions of off-book dollars to manipulate all equities (by purchasing futures through a trading desk at the Federal Reserve), as well as the bond market and precious metals (via the too-big-to-jail banks). https://solari.com/blog/the-exchange-stabilization-fund-with-rob-kirby/
The Central Banks are controlled by the Bank of International Settlements in Basel Switzerland the BIS controls the banks and not the other way around, the question is who controls the BIS, which is immune from governmental intervention and civil prosecution. http://laws-lois.justice.gc.ca/eng/acts/B-1.5/page-1.html
Privately owned banks have been running the world for centuries. Their manipulations are the prime moving force behind the wars that have plagued mankind. http://www.whatreallyhappened.com/WRHARTICLES/allwarsarebankerswars.pdf
Publicly owned banks and utilities are the answer, the banksters must be removed from power.
Perimetr, I notice that you didn’t answer Dr NG Maroudas’ question. So I will ask it again: who creates the U.S. money, the U.S. government or a private organization (the Federal Reserve)?
It’s easy to see that “Federal Reserve Note” is printed on a U.S. dollar bill.
If the Fed creates the dollar (and I’m pretty sure it is), why is it considered acceptable for a private organization to control a country’s money?
To those who try to claim (fraudulently) that the Fed is under government control, I ask: “When was the last time the Fed was audited by Congress (i.e. not by a puppet hired by the Fed itself)?”
Another question. What is the clearing authority for Fed issued paper. How can this paper be rendered worthelss by, say, a declaration of war.
Some really strange things going on if one pays attention. Recall those Japaneese guys arrested smuggling phoney billion dollar bonds on the Itallian Swiss Border?
The Federal Reserve is as much a part of the Federal government as is the Federal Express — it is privately owned
see The Creature from Jekyll Island: https://www.youtube.com/watch?v=lu_VqX6J93k
the Federal Reserve Conspiracy:
One of the reasons that Kennedy was killed was because he had the Treasury issuing currency, while planning to end the Federal Reserve. The Treasury notes were withdrawn from circulation after his murder.
sorry, here is a better link to the Federal Reserve Conspiracy
“page not found” gone!
“The government makes it illegal not to accept its fiat currency in exchange for all goods and services, and it has the ability to create as much fiat as it wishes.”
This isn’t strictly correct, as within the US you can create local currencies, for example based on work hours.
AKA community currencies. See list, ‘List of community currencies in the United States’ into search engine.
Vendors can reserve the right to not sell something. So one can decide to not accept US dollars, even in the US. This can be done by contract.
Typo: The UW is the sovereign issuer of its own currency.
Should be The US….
OK Mr Harold, thats pretty cool.
But what percent of this debt is owed to outside the US – UW. What happens when the Chinese or whatever want to change there bits of paper to RMB or god forbid Bitcoin. Wouldn’t this drive down the exchange rate. I imagine the limits to printing paper are inflation and exchange rate and as the money is printed the inflation is already counted.
And while I’m thinking about this, when you buy a UW bond what do you buy it with ? Dollars ? if so bonds would take dollars out of circulation and redeeming them would stoke inflation. So whats really going on !
Im not being smart here, Im actually curious, most people are clueless but Im not sure i really know either.
It depends on the country/currency: Chinese RMB is controlled in a tight range with the USD. So it wouldn’t do much to exchange rate. Where it would show up is in commodity prices on Chinese exchanges. In the US, commodities are controlled, as per ESF (above) and the big commercial banks that have unlimited futures position ability, as was revealed in the GFC, they didn’t really want people to know about that. What it means is price controls of commodities, in the US.
That is a very good post. Taxes are not government ‘income’, but a prerequisite to constructing a social and legislative architecture (courts, prisons, enforcement agencies, trading venues, etc) through which national centralised order and balance are maintained.
There was an article on here a while back about ‘Bitcoin’ by a fan. There is good reason to believe that Bitcoin itself is a trial balloon of government origin, exploring the move to digital fiat and fully traceable, taxable economies based on this new triple ledger accounting system.
It is, however, morphing into something unintended that directly challenges the idea of tax as a foundation stone of social control. As much as politicians do not understand their own currency and money supply, the same generation of politicians and economists account for the inherent decentralising power of the internet even less.
.govs the world over don’t fear ‘Bitcoin’ but fear decentralised exchanges and platforms, like Bisq (https://bisq.network/), or Ether (https://www.reddit.com/r/EtherDelta/comments/6hrxjw/etherdelta_guides_for_first_time_users/), and decentralised money, like IOTA (http://iota.org/). If governments openly discussed the benefits of outlawing cash and favored the creation of digital money and trialed Bitcoin etc, they never anticipated this. These are remarkable and ingenious uses of the inherent nature of the internet that entirely sideline the current economic architecture that you have described. As China’s failed ban on cryptos and miners has shown everyone, no one can stop this without shutting down the internet.
This triple ledger accounting system coupled with peer to peer transactions has been widely described as transformative, as the shift from single ledger to double ledger in the 14th century entirely dismantled and transferred existing power structures to new entities. It represents the full flowering of the potential of the internet and, as one consequence, the end of the intricate financial system you carefully described.
Since cryptos have been stolen multiple times, they will be a failure until that is actually resolved, and not just ignored. the accounting system is not secure, as the thefts reveal.
Don’t dismiss things you haven’t even basic knowledge of. No cryptos have ever been hacked. Only exchanges and unsecured wallets have been stolen from, mostly by governments, and otherwise by thieves, just as both entities do from everyone’s trad bank accounts.
And I specifically referred to the next generation of decentralised exchanges and coins, which are unhackable and theft proof by their very nature.
proper gander on November 13, 2017 · at 8:06 am UTC
“Your banking system and wealth has been built on extraction of foreign wealth by debt since 1913. Before this, the US was a zero. This is the point you want to return to.”
Now check with Harald’s explanations about the Fed (1913), above and below. Where has the vast majority of US debt been held over the decades? In the US itself, by US citizens and US institutions. That extracts nothing from overseas. Who is the one that lacks basic knowledge??? And another thing, what wealth is it you refer to? Money? Also check the MMT sites. We don’t need to return to 1913, as Harald explains. You don’t know how the US was built. Perhaps you don’t know when the US had a navy equal to that of Great Britain? Zeros can’t create navies equal to the greatest prior empire from nothing. And that was before the US started on the modern era in the 20th century, without any help from foreign plunder.
And about cryptos, what I actually know about them, I’ll keep to myself. You’ll be surprised.
I am not going to be lured off my comment into a general haranguing match. Harold, or Cullen Roche as I think he is properly known, is a financial advisor and portfolio manager and political aspirant with a very good handle on the internal economy of the US. He writes specifically and with great insight about this, and this only, on his site (https://www.pragcap.com). He does not venture into the troubled waters of how the US projects its economic interests around the world.
There is a dichotomy in the US; its internal life and economy vs its imperial life and economy abroad. It is possible to be a US citizen, corporation etc and ignore its imperial lifeblood entirely, even deny its existence. Cullen is spot on about the machinery of internal US economics, but the increasing global suspicion and hatred leveled at the US is a consequence of the other side of the US. Cullen does not engage in this parallel US universe either in general, it seems, or in his comment. That the US drains the world of cash and resources at the point of a gun. I don’t disagree with you on that, and as a Brit I can tell you with absolute certainty that when that lifeblood dries up, even the domestic economy returns to zero, and pretty damn quick. Once your internal structures and population become dependent on a stream of stolen goods and cash (Empire), it is quite difficult for a productive, busy guy or company to imagine to what degree their natural gifts in fact only find traction in a heavily subsidised economy, or how quickly labour becomes fruitless once that subsidy is removed. The US is not fighting around the world because of its strength, but for its very survival, or maintenance of this subsidy. Cullen writes with insight about the mechanics of this subsidised economy. That’s as far as he goes.
My point about cryptos is conceptual, and that they are empire-breaking. Triple entry accounting in either block chain or tangle encryption allow for peaceful trust systems to be built between individuals globally, without the need for national power brokers, treaties, trade agreements and banks to guarantee the trust between individual entities. This is why I asked Cullen how he sees his internal economy working out with cash and trade circumventing centralized power.
Having secured their monetary needs via direct takeover of primarily Saudi Arabian oil, the main institutions of the Zionist Empire, including the Pentagon and CIA, can comfortably collapse the US dollar, robbing all those who hold assets in this class of everything, while continuing to fund all major activities related to their long promised Zionist Hundred Years War.
Any sane person knows you can’t continuously cut taxes and raise spending — so the only logical conclusion is they are destroying US national power intentionally, to be replaced with Democratically unaccountable Zionist Money Power, a currency to which only they will have access whereas you will be placed on an electronic currency teet, thereafter to be controlled in every aspect of your existence.
Trump is and always has been set up man for the greatest Zionist scam in history. He is taking down the United States to eliminate the last great potential threat to the unchallenged hegemony of the Zionist Class — and their mad-sick doctrine of planetary genocide.
PS it strikes me that Russia likewise benefitted from the steep rise in oil price consequent on Operation Enduring Freedom. The 14 years since the Bust/BLiar invasion of Afghanistan/Iraq overlaps neatly with the 15 years since Putin came to the presidency. So the USA has spent $5T to help Pres.Putin restore Russia to prosperity and world influence. I hope the people of the USA, while they work to pay off their National Debt, consider their money well spent by the Dumbo Party and Donkey Party who play musical chairs in the Oval Office.
Many empires along history have died of overextension and endless and useless wars .
The characteristics of the USAF is to spend 10 times more, than it really costs. But that money isn’t lost – it is all in pockets of big fat cats, and from that pockets the money comes again into a military industry, say – it reinvests itself.
The decline of the mid 1970’s coincide with the abandon of the gold peg for the USD in 1971, a subsequent orgy of cheap credit and the substitution of “financial capitalism” to “industrial capitalism”, so a gradual erosion of productivity & inventions. The US could never have waged so many wars with a gold standards because financing huge deficits was impossible; and even if the gold standards had been dropped -but WITHOUT the USD as the world currency reserve -, those monstruous deficits would have triggered a huge inflation. Now the chikens are coming home to roost all at the same time.
“Remember that correlation is not causation”; except when it is.
I live in the ‘West’.
It doesn’t take very much observation and critical thought to understand that we are pawns contributing to ‘the bad guys’, and that all of the shite we’ve been bombarded with about ‘the boogy-men’, is utter distortion of the actual historical events.
An oil contract will be denominated in convertible yuan in 2017!
Probably a Venezuelan contract to China.
It’ll be just like the Titanic; they thought it was invincible, unsinkable, but it went down like a ton of concrete.
The US fiat ‘currency’ will go down like a nobody thought a large building designed to resist the impact of a jetliner, went down according to the official story.
Just as dirty, and just as ugly.
It’s already going, but those disciples, trained for their entire lives in the “way of deception”, can keep a secret and tell lies very well through their mass media (main stream media) / propaganda agency.
They need a major global confrontation to hide the hideousness of their theft and manipulation of the people in the ‘west’ and the mass murder of people in places where it seemed ‘profitable’ to ‘intervene’.
Nothing like the fog of war to keep people from thinking about anything beyond survival.
The gangsters have their puppet in office.
I still think he was preferable to the fixed alternative, but with the latest endorsement of international ‘secret’ gangsterism, we can see the beast is firmly in control of them, the gangsters. But the way he’s being painted by their propaganda team, they must have something even worse lined up in the competing brand. One could assume that they will get him to make all of the nasty anti-social decisions, then get rid of him, one way or another, and the next stooge will undoubtedly say, “I inherited this situation from that [some derogatory, in line with the aggressive branding narrative, continuing to be rolled out]“!
Appreciate the article, very concise considering the far-ranging subject areas.
I appreciate many of the 17 comments so far (there will undoubtedly be many more).
Love the mods (the glue that holds this place together; wink, wink, nudge, nudge, you know what I mean).
Trillions are ‘disappeared’ like students in Argentina during the junta.
Trillions in DC at the Pentagon, lost in the arcane “bookkeeping systems”, so decrepit that Trillions have disappeared.
Trillions in Iraq have been spent, but it is not accounted for in men, machines or ammo, construction or destruction.
Maybe 5-6 Trillion is just ‘gone’ since 9-11.
Afghanistan continues because that is the Bermuda Triangle of Trillions.
There are so many black budgets in so many departments, agencies and bureaus that no one can follow the money because it was never “there” to be followed.
theres alot on the internet now – starting from Catherine Austin Fitts about the $21 trillion MISSING money –
here’s a link – https://missingmoney.solari.com/
its a great read and there’s a great youtube about it too here – https://www.youtube.com/watch?v=7CwpjIwwI9o
Well the idea that the taxpayers have significant contributions to the continuation of this foreign policy is illusion. Taxpayers and the US domestic population economy structure are only there to promote the idea that US currency is backed by its strong economy. In reality the money that moved the country in to it’s global overreaching were the few money changers, bankers, and massive MIC.
Common Myths About the Federal Reserve
Few institutions invoke more emotion and mythology than global central banks. And the Federal Reserve, being the central bank in the world’s largest economy, happens to garner a special amount of attention. Unfortunately, not all of this attention is warranted and much of the understanding about this institution is misleading or incorrect. This page will clarify some of the myths and misunderstandings about the Fed.
Myth #1 – The Fed Controls the Money Supply.
This nefarious myth results from decades of bad economic theory and academic misunderstanding of how banking works. The story usually says that the Fed sets a quantity of reserves and banks then multiply those reserves into loans meaning that the Fed has a direct control over the quantity of money being created. But the financial crisis proved that this theoretical view is precisely backwards. In fact, banks make loans first and find reserves after the fact. In other words, the Fed accommodates the quantity of loans by supplying the necessary quantity of reserves. As a result, the money multiplier that we all learn in school is wrong and the Fed has no direct control over the quantity of loans/deposits issued meaning that the predominant form of money (deposits) is controlled almost entirely by private banks and not the Central Bank.
See also, “Where Does Money Come From?“, “The Basics of Banking” and “The Myth of the Money Multiplier”
Myth #2 – We Should “End the Fed”
In recent years there have been numerous calls to “end the Fed”. This is usually based on the idea that the Fed manipulates the private sector economy and distorts what should be the “real” price of goods, services and financial assets. These concerns are not unwarranted entirely, however, we really wouldn’t want to end the Fed.
At its most basic level, the Federal Reserve (and all Central Banks) is just a clearinghouse. This means they operate a very simple purpose of helping banks settle interbank payments daily. This is a service that can be handled more efficiently by private banks in 99% of instances, however, we have this interbank clearinghouse for the 1% of the time when the market becomes dysfunctional. That is, during financial panics a private clearinghouse will generally fail and exacerbate how deep a recession will be as problems filter from the banking system into other parts of the economy simply because the average business can’t settle a payment.
Prior to the creation of the Fed we saw numerous instances where garden variety recessions turned into depressions because the banking system would fail. This was due, in large part, to the failure of private clearinghouses that would shut down during panics. This is because private entities, being concerned about solvency and profitability, would often shut down their payment clearing service to other banks they didn’t trust. This was essentially what started to transpire in 2008 when big banks wouldn’t clear payments with other big banks. But the Fed created a market in overnight loans thereby skirting this worry. In other words, we created an entity that could leverage the powers of the government to keep the payment system open even during periods when private entities wouldn’t operate.
At its most basic level a Central Bank is a clearinghouse before all else. This is a very practical and useful service as it insures against the private banking system from shutting down during financial panics. This doesn’t mean there aren’t reasonable arguments against some of the Fed’s other interventions in the interest rate market or policies like Quantitative Easing, however, ending the Fed would take us back to the days of private clearinghouses and we know, based on our turbulent history, that this is a design that doesn’t function very well when we most need our banking system to operate smoothly.
Myth #3 – The Fed is a “public” or “private” institution.
There’s a tendency to imply that the Fed is either a public or private institution depending on your politics. Some people tell fantastic stories about how the Fed was formed by a secret cabal of bankers designed only to serve the banks. Some others tell stories about how the Fed is purely a part of the US government and serves only a public role. Neither story is a balanced perspective of the reality of the Fed’s role in the monetary system.
When we start to discuss the Fed, it helps to understand why the Fed even exists in the first place. During the late 1800’s and early 1900’s the US financial system underwent a series of financial panics that crippled the private banking system for long stretches at a time and led to much deeper recessions than necessary. The health of the US monetary system was largely tied to the health of individual banks as there was no national currency and bank notes were not only unstable (due to excessive lending, near zero regulation and counterfeiting), but were also susceptible to bank runs.
The National Banking Acts of 1863 & 1864 resolved many of these issues (including the national currency and regulatory issues), but did little to improve the liquidity problems that could arise during a crisis. Some central clearinghouses arose in the late 1800’s, but they were not broad enough to span the scope of the nation’s growing banking system. In 1907, the US suffered its largest banking crisis as the entire US banking system seized up. The lack of a central clearinghouse made it impossible to trust other banks. The crisis only ended when JP Morgan effectively acted as a central liquidity provider and made a series of enormous loans to the NY banks. This crisis made it clear that the nation needed a more secture central clearinghouse to oversee and interconnect the national banking system.
In 1913 the US Congress passed the Federal Reserve Act of 1913 thereby establishing the nation’s central bank. This established the Federal Reserve System which established a nationwide central clearing system for the nation’s banking system. The system is comprised of both public and private components.
The Board of Governors is the national component of the Fed System. The Board of Governors establishes monetary policy, exercises regulatory control over the financial services industry and oversees the nation’s payments system. The Fed System is also comprised of 12 regional Reserve Banks which are owned by member banks, private banks. The regional bank offer services as “banks for bankers”.
Although these regional banks are owned by the private banks, the ownership structure actually affords the private banks only marginal control over the regional bank. For instance, shares of stock in the regional Fed banks cannot be sold, entitle the banks to just a 6% dividend and do not give the member banks full control of determining Fed leadership. Member banks elect 6 of the 9 Directors of Regional Banks to manage daily operations of the banks. Of these Directors, Class A Directors are elected by member banks to “represent the stockholding banks”. Class B Directors are elected by member banks, but represent the public. And Class C Directors are appointed by the Federal Reserve Board to represent the public. And the 7 members of the Board of Governors is appointed by the President of the US.
The Federal Reserve System is often viewed as being conflicted because it serves two masters. It enacts all of its policies through the banking system, but has a public purpose serving dual mandate to help achieve maximum employment and price stability. Of course, it cannot achieve its dual mandate if the banking system is not healthy so the Fed often serves as lender of last resort and an aid to private banks. If this appears like a conflict of interest you’re probably not entirely wrong to assume so. The Fed serves private banks as well as the public.
Because of this public/private design the Fed has sometimes been referred to as a “hybrid” system. It is neither a purely public serving institution nor private serving institution and while components of it are owned by the member banks, the system as a whole is not technically owned entirely by anyone in particular. There’s no need to think of the Fed as a purely public or private institution. It serves both the public as well as the private sector and has elements of ownership that make it both a public and private institution. Those who are selling an extremist “this or that” perspective are usually trying to pitch a political agenda.
Myth # 4 – The Fed is not audited.
The Fed is regularly audited by multiple parties:
“Yes, the Board of Governors, the 12 Federal Reserve Banks, and the Federal Reserve System as a whole are all subject to several levels of audit and review:
The Government Accountability Office (GAO) conducts numerous reviews of Federal Reserve activities.
The Board’s financial statements, and its compliance with laws and regulations affecting those statements, are audited annually by an outside auditor retained by the Office of Inspector General (OIG).
The Board’s OIG audits and investigates Board programs and operations as well as those Board functions delegated to the Reserve Banks. Completed and active GAO reviews and completed OIG audits, reviews, and assessments are listed in the Board’s Annual Report. (Before 2002, the reviews were listed in the Board’sAnnual Report: Budget Review.)
The financial statements of the Reserve Banks are also audited annually by an independent outside auditor.
Each week, the Federal Reserve publishes its balance sheet and charts of recent balance sheet trends, as well as provides an interactive guide to the Fed’s balance sheet. The balance sheet is included in the Federal Reserve’s H.4.1 statistical release, “Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks.”
In addition, the Reserve Banks are subject to annual examination by the Board. The Board’s financial statements and the combined financial statements for the Reserve Banks are published in the Board’s Annual Report.
See our audit page for more information on all of the above audits and more information on the accounting, financial reporting, and internal controls of the Federal Reserve Board and Federal Reserve Banks.”
Myth #5 – The Fed “Manipulates” Interest Rates
It’s very common to hear that the Federal Reserve “manipulates interest rates”. This is based on the idea that interest rates would be better “set” if they were controlled by a private market instead of a government entity like a Central Bank. Unfortunately, this is based on a lack of understanding of banking and central banking.
A Central Bank is little more than a central clearinghouse where payments settle. Before there were central banks payments between banks were settled at private clearinghouses. The problem with this arrangement was that banks would stop settling payments during financial panics and this would exacerbate depressions. A central bank leverages government powers to ensure that this doesn’t happen. The 2008 financial crisis was a great example of this. When private banks stopped lending to one another the Fed operated as the “lender of last resort”. This meant that even though many banks were insolvent mom and pop could still buy necessities via the banking system because most banks didn’t stop operating thanks to the Fed’s backstop. Had the Fed not lent to firms in need the crisis would have bankrupted even the largest banks and the economy would have certainly entered a substantially more catastrophic crisis. You literally wouldn’t have been able to buy anything unless you had cash under your mattress.
In order to operate as a central clearinghouse the Fed needs to set an overnight rate at which it lends to banks. Since the Fed requires most banks to utilize this system the banks naturally try to lend their reserve deposits which puts downward pressure on overnight interest rates. Therefore, the natural rate of interest on overnight loans is 0% in the Fed Funds market. This means the Fed actually has to manipulate rates HIGHER from this 0% rate. This is not theoretical, this is simply a mathematical reality of a system with a Fed Funds market in which banks operate within this closed system.
While the overnight rate is important to overnight loans it is not the dominant rate in the economy as is often portrayed in economic textbooks. No, the banking system controls most other rates as a function of creditworthiness. For instance, your mortgage and your credit card rate are more a function of your creditworthiness than anything else. While the overnight rate influences the bank’s ability to earn a profit it is not the overriding factor driving what rate you borrow at. Additionally, the Fed determines the overnight rate by gauging the health of the economy and the banking system. So it’s better to think of Central Banks as setting overnight rates in response to the economy. And banks set the more important rates (like mortgages and credit card rates) mainly based on demand for their products and the creditworthiness of those using those products.
Further, it’s helpful to note that the Fed sets its overnight rate primarily by gauging the current and expected future state of the economy. The Fed sets the overnight rate by trying to guess where the economy is headed. So they are generally one step behind where the real economy is going (because predicting the future is really friggin’ difficult). In this sense, the Fed is usually reactive to the state of the economy and is setting rates where the economy is or was as opposed to where the economy is going. Therefore, when inflation is low we will tend to find that interest rates are also low. When the economy heats up the Fed will generally raise rates in tandem to help dampen the risk of an irrational boom. What looks like “manipulation” or control is really more like a man chasing a dog on a leash.
Side note – of course, we could operate without this central clearinghouse at all. But we already know how that works. The panic of 1907 and the 6 depressions in the 1800’s were mainly a function of a flawed clearinghouse system where economic panics turned into banking panics which turned into depressions. The Fed system helped improve that flaw. Additionally, we know from the recent LIBOR scandal that private banks are no more reliable at setting interest rates than central banks are. So, what we have is essentially a system that is the lesser of two evils.
Myth #6 – The Fed exists as result of a conspiracy to create an entity that only serves private banks.
In 1910 a secret meeting was held on Jekyll Island off the coast of Georgia to discuss the potential future of the nation’s central bank, an idea that had been in motion ever since the Panic of 1907. Attendees included Senator Nelson Aldrich, Frank Vanderlip of National City Bank, Henry Davison of Morgan Bank, and Paul Warburg of the Kuhn, Loeb Investment House. The plan that came out of this meeting was known as the Aldrich Plan and created a loose structure for the Federal Reserve Act that was passed in 1913. The original Aldrich Plan, however, was defeated in the House of Representatives in 1910 so if there was a conspiracy to pass the plan in its original form it surely failed.
More importantly, the very creation of the Federal Reserve System increased regulations and national control immensely. This act was in no way empowering the banks relative to the previous system in which the nation’s banks acted largely independent of federal control. If anything, the Fed Act clamped down on banking and gave the federal government substantially more control. If anything, the Federal Reserve Act wrestled some control away from banks and into the hands of the Federal government.
It’s certainly true that the nation’s bankers played an influencing role in developing the Federal Reserve System, but the system was designed not only to strengthen the nation’s banking system, but also to provide the federal government with more central control over it. The Jekyll Island meeting and the Aldrich Plan played an influencing role in the formation of the Fed, but it is not quite the conspiracy theory to enrich the banks that some people make it out to be.
Myth #7 – The Fed operates against the interests of the US government and costs taxpayers money.
The Federal Reserve System was created with the intention to provide a central clearinghouse for the nation’s banking system as well as a more coordinated regulatory framework for banking. This system helps maintain a stable payments system and works in favor of stabilizing the US economy. Further, the power of monetary policy is designed to give the central bank some policy control over the nation’s money to help achieve its dual mandate of maximum employment and price stability. As a whole, this is a public good even if it is not always perfectly managed and often gives the appearance of enriching banks.
At times, it is implied that the Fed is a financial burden on the nation, but the Fed does not cost the US taxpayer anything. The stockholders of the Fed contribute paid in capital and the annual operations of the Fed are maintained by its own income. In fact, any excess profit the Fed earns is returned to the US taxpayer via the US Treasury (and by law, used to pay down federal debt or buy gold). In 2012 this income was substantial and amounted to over $90B. As a whole, the Fed is actually a substantial revenue source that the US government would not otherwise have.
Myth #8 – The Fed is unconstitutional.
The Federal Reserve Act of 1913 was established via Congress. But this wasn’t the first time the constitutionality of the nation’s central bank had been tested. On many occasions the constitutionality of a central bank has been questioned and continually upheld by the Supreme Court:
The most famous instance was McCulloch v. Maryland in which the Supreme Court ruled 9-0 that the Second Bank of the United States was constitutional.
The case was affirmed in Osborn v. Bank of the United States. The decision was upheld under the justification that the nation’s central bank provides necessary support in aiding the power to tax, borrowing money and regulating interstate commerce.
Nixon v. Individual Head of St. Joseph Mortgage Company upheld Federal Reserve Notes as Legal Tender.
Myth #9 – The Fed is Omnipotent.
A good deal of mainstream economics is based on the idea that the Fed is an extremely powerful policymaker. The Financial Crisis has shed a good deal of doubt on this idea as cutting interest rates and huge policies like QE have been relatively ineffectual. This makes sense from an operational perspective since the Fed has a limited set of transmission mechanisms through which it can impact the private sector.
For instance, the Fed is largely just a clearinghouse serving as a bank for the banking system. This means that most of its operations rely on working through the banking system in an indirect route to the private sector economy. For instance, when the Fed changes interest rates it does so by altering the quantity of reserves or the Interest on Reserves in the banking system. This directly impacts the balance sheet of banks, but does not have a direct impact on the private sector as most interest rates are not controlled by the Fed and correlate more closely with the state of the real economy. As a result, the Fed often times can’t induce borrowing with a policy lever.
Furthering this is the fact that banks don’t lend reserves. Many mainstream economists have assumed over the years that there is a money multiplier between the quantity of reserves and the quantity of loans that are made. This has been proven false over the years as we now know that banks don’t lend out reserves and altering the quantity of reserves has no direct impact on whether or not banks make more loans. The money multiplier we all learn in econ 101 is completely wrong!
The bottom line is that many of the assumptions in mainstream economic models are based on flawed assumptions about the efficacy and operational reality of the Central Bank’s policy impacts. While Central Banks are certainly not powerless, we should be careful assuming they are more powerful than they really are.
Whom Does the Fed Serve?
Thank you Harold. Straight forward. No baloney.
“The Financial Crisis has shed a good deal of doubt on this idea as cutting interest rates and huge policies like QE have been relatively ineffectual.”
The QE programs have been highly effectual, for asset inflation. QE has done nothing for the ordinary, main street economy. But for the big commercial banks, QE has been highly beneficial.
A World Without the Federal Reserve – Pragmatic Capitalism
More on the Fed
Mar 17, 2015 – The Federal Reserve is, without a doubt, one of the most controversial entities in the world. … If the Fed didn’t exist then we’d essentially revert back to the old private clearing system we had before the Fed existed. … In the 60 years between 1853-1913 when the Fed was created …
Myths About the USA’s Fiscal Union | Pragmatic Capitalism
Jul 25, 2015 – Importantly, many of the banking crises that occurred prior to 1913 were a direct result of a lack federal integration. For instance, prior to 1913 and the implementation of the Federal Reserve the private banking system ran its own version of a central clearinghouse.
Who Owns the Federal Reserve?
First, it helps to understand what the Fed really is. The Federal Reserve System was modelled after the New York Clearinghouse that existed in New York during the 1800’s and 1900’s. As its name states, the New York Clearinghouse was just a big clearinghouse where many of the big banks would come to settle their interbank payments. Unfortunately, it wasn’t broad enough to handle the scope and complexity of the US banking system so these regional clearinghouses were deficient in dealing with banking crises and liquidity issues. The Fed System took this private model and ramped it up into a public/private hybrid model to create a national clearinghouse for interbank payments. You don’t hear much talk about this on a daily basis, but that’s really what the Fed is – it’s just a big clearinghouse to help smooth the payments system. All the other stuff it gets attention for (like monetary policy) is just a sideshow to this primary purpose it’s serving – to maintain a healthy functioning payments system.
But the Fed is a weird entity when it comes to “ownership”. It exists due to an act of Congress. But it is also considered an independent entity because it is not part of the Executive or Legislative branches of government. The Fed exists because Congress created it, but it doesn’t enact policy measures with any Congressional or Presidential approval. Politically, this makes it a very independent entity.
The Regional Fed banks are arms of the Fed system that serve like regional versions of the NY Clearinghouse. One thing that muddies this discussion on “ownership” is the issuance of stock by the regional Fed banks to the member banks. This stock pays a fixed 6% dividend and gives the banks a claim on the Fed’s annual profits. But let’s keep this in the right perspective. Last year the Fed earned $90.5B. Of this, $1.6B was paid out in dividends. The remaining $88B was remitted back to the US Treasury. While the US Treasury doesn’t technically own shares in the Federal Reserve the Fed is required to remit its profits at the end of the year back to the Federal Government. As you can see, remittance often dwarfs any dividends paid back to the banks. In other words, the US Treasury is the recipient of most of the Fed’s profits.
Let’s also not forget the primary purpose of the Fed. Remember, the Fed exists to serve the payments system. This means it is a supporter of the US banking system. Before it can ever achieve its dual mandate on price stability and full employment the Fed must ensure the payments system is healthy. Therefore, the Fed is often viewed as a servant to the banking system while also trying to be a public purpose servant. It has, in effect, two masters by design.
The Federal Reserve system is an imperfect, but rather innovative clearinghouse. Its structure as “independent within government” makes it hard to decipher precisely who owns it. I prefer to think of the Fed as being an entity designed to help support the US payments system (which thereby makes it a bank facilitating entity) which serves public purpose and private purpose. In other words, it’s better to think of the Fed as a public/private hybrid and not really being “owned” by anyone.
So why do we need a private cartel to print the USA dollar, even if there only making a 6% divi. its seems so unfair to take advantage of them like this.
And can the Germans have their gold back please……
“The Federal Reserve sent the German auditors back to Germany after telling them that they were not allowed to see the gold, citing “security concerns”. Two follow-up delegations were, respectively, shown “one representative gold bar” and a suspiciously empty room containing a few bars. The auditors were neither allowed to enter nor were they allowed to inspect, test or even touch the gold. Understandably the incident caused a scandal when the story broke in Germany.” NSNBC dot me
You’re thinking ideologically. The Fed is not a “private cartel.” It is what it is, please read more carefully and dispassionately. The libertarian view of the Fed is simply ideological in nature.
You omitted the full scale of corruption happening unfortunately by the private banks design. Too big to fail is the words.
OK the word private is was badly used, but still if it looks like a duck, quacks like a duck and walks like a duck, it’s a duck
Cartel “A combination of independent business organizations formed to regulate production, pricing, and marketing of goods by the members.”
And if a small group of powerful private banks wanted to take control of the dollar this is exactly how they would do it.
And yes I have an ideology but that doesn’t mean im not rational, logically only those who have no idea have no Ideology and Im not buying into the idea that believing the same as everyone else means its not an ideology. For that matter would Mr Greenspan be free of ideology !
The creation of the dollar should not be in private hands, clearing functions have nothing to do with this. The dollar is not gold backed there is no justification for private (Or semi private) ownership or control of the dollar.
And as for auditing – is NSNBC correct ?
“The Federal Reserve sent the German auditors back to Germany after telling them that they were not allowed to see the gold, citing “security concerns”. Two follow-up delegations were, respectively, shown “one representative gold bar” and a suspiciously empty room containing a few bars. The auditors were neither allowed to enter nor were they allowed to inspect, test or even touch the gold. Understandably the incident caused a scandal when the story broke in Germany.” NSNBC dot me
9-11 is clearly false flag. Two planes destroyed three buildings and also there was not any airliner hit into Pentagon, it was something else.
Controlled demolition on all three buildings, the same pattern. False flag and nothing else. Shock and awe strategy.
9/11 was an inside job, organized so that the US could have an excuse to invade Iraq and Afghanistan. Iraq needed to be invaded for its oil, and also because Saddam Hussein discarded the dollar in his oil transactions, beginning to use the euro. Afghanistan needed to be invaded for its geostrategic position, for its heroin and for its mineral wealth. Those 19 Saudi hijackers, who could barely fly a sports plane, were provided by Saudi Arabia to the conspirators as a deal. Business is business. Result ? Iraq and Afghanistan were attacked, but not Saudi Arabia.
Analysts now acknowledge that the wars in Iraq and Afghanistan were a huge mistake. Years back they calculated that they cost 6 trillion dollars. The US lost financially, politically and militarily. While the US was fighting its wars, Russia and China were building up their military, not only numerically, but also qualitatively. What is remarkable is that neither NATO nor the Pentagon noticed this, especially when Russia is in question, believing their own propaganda that Russia possessed “rusty junk” from the Soviet period. The US did not concentrate on improving its high tech, keeping much of the old, as proven in Syria, when Trump fired those Tomahawk cruise missiles, more than half of them being sent off course by Russian electronics. Worse, all these wars have worn out the US military, both men and material.
The first shock for NATO and the Pentagon was the war in Georgia, to which Russia responded with unexpected efficiency. The second shock was the reunification of Crimea with Russia. Most people don’t know this, but NATO sent some of its best special forces to Crimea for a sneak attack against the naval base of Sevastopol. These forces got themselves surrounded by Russians, who let them escape. The third shock was the Russian intervention in Syria, and this was probably the biggest shock. NATO failed to register the movement of Russian combat aircraft and troops to Syria, noticing the event only after Russians started establishing themselves in the country. The actual combat operations of the Russian Air Force against ISIS were an unpleasant surprise for NATO. Both Russian pilots, aircraft and high tech showed unexpected efficiency. Some of the high tech, like the Kalibr cruise missile, were unknown to NATO. ISIS has been crushed, and NATO did not plan it that way.
As for the US Defense Budget, analysts calculate that its between 1 trillion and 1,2 trillion dollars, much larger than the US Government admits. The point is how long can it be maintained at that level.
The Washington political establishment, blindly following Wall Streets globalist agenda, has forgotten the old army rule, which goes like this:”He who tries controlling everything ends up controlling nothing”. Its going that way. Cracks are appearing in the Empire. Even Americas allies are beginning to turn against the US. We all know how its going to end. But does the Washington political establishment and the American public know this ?
Here’s one of the latest costs in Ukraine:
U.S. media disclose identity of U.S. Army Guard member who died in Ukraine’s Lviv
A 21-year-old New York Army National Guard member who deployed to Ukraine as part of the 7th Army Training Command’s Joint Multinational Training Group-Ukraine died in the west Ukrainian city of Lviv on Sunday, December 10…
According to the state Division of Military and Naval Affairs, Joseph J. Nelk, 21, died of apparently natural causes in a non-training-related incident…
Nelk was one of 200 New York Army National Guard soldiers assigned to assist training Ukrainian Army troops at the Yavoriv Combat Training Center…
“natural causes” for a 21-year-old…hhmmm
also what is “natural causes in a non-training-related incident”
An “incident” which caused someone to die of “natural causes”. The only thing I can think of is an asthma attack, but I don’t think someone with more than very mild asthma would be serving in the army abroad.
“The Secrets of the Federal Reserve” is the seminal book about our Federal Reserve Bank written by Eustace Mullins.
Central Banks are all about financing wars. Before WWI, no country could afford to start a war. After the cabal set up the FED, run by UK banks, all Europe could afford to go the war, including the Bolsheviks.
As a for instance, Bernard Baruch managed the War Board contracts for President Wilson — and ended WWI with an extra $200 million in his pocket. And they call that crook a financial genius.
Eustace has many YouTube videos.
His FED video follows: https://www.youtube.com/watch?v=A0K4PVSKGtU&t=2214s