End The FED
by Gary North
LewRockwell.com
Sun, Aug 30th, 2009 12:00:00 am
I do not recall this in my lifetime. A majority in the House of Representatives has co-signed H.R. 1207, a bill introduced by Ron Paul to have the Federal Reserve System audited by an independent government agency, the Comptroller General's office.
The bill has been bottled up in committee by Barney Frank, who has insisted that he is doing this in order to better coordinate consideration of the best way to gain greater transparency from the Federal Reserve. He has not said that he favors an independent audit of the FED.
It would be easy for Congressman Frank to hold hearings on the bill. This would allow Dr. Paul to bring in expert witnesses on the FED to make the case for an independent audit. It would get a lot of YouTube play. It would be the first time since the replacement of eccentric Congressman Wright Patman in 1975 as the chairman of the House Banking Committee that the FED has been exposed to anything like serious criticism in Congress. (Patman, an inflationist and a greenbacker, hated the FED. He was chairman of the House Banking Committee, 1965–75.) Congressman Frank has yet to announce hearings.
There was a posting on the DailyPaul site that Frank will hold hearings soon. Someone heard it on the radio. I will believe it when I see the YouTube videos.
The FED in June hired a public relations expert, Linda Robinson, to deal with Congress. She was formerly a lobbyist for Enron. I have little doubt that it was H.R. 1207 that forced the FED into this move.
Now Ron Paul's book, End the Fed, is about to be published. It is expected to become a best-seller. Think about this. There have been books attacking the Federal Reserve System for over ninety years, but they have been written by obscure people who no one in the general public has heard of. They have not sold well. They have not been written by someone who persuaded over half of the House of Representatives to support a bill to audit the FED. They have not been written by someone who once raised over $30 million in a run for President.
This is unprecedented. For the first time in the history of the Federal Reserve System, there are literally millions of people who have heard of the FED and who would like to see it shut down.
There have been academic and investment critics of this or that policy of the FED, most notably Milton Friedman, who criticized the FED for not inflating enough, 1930–33. But there has never been a serious audience ready to listen to arguments on why a system of 12 private banks should oversee monetary policy, and why one of them, the New York Federal Reserve Bank, should execute this policy without having to answer to anyone.
THE BLOOMBERG LAWSUIT
The Bloomberg news service has sued the Board of Governors of the FED under the Freedom of Information Act. The lawsuit says that it is illegal for the Board of Governors to refuse to release information on which banks have received financial aid from the FED.
The Board of Governors countered with this argument. The New York FED is a privately owned entity. It executes monetary policy. It is not subject to the Freedom of Information Act. The FED also argued that the banking system would be threatened by the release of this information.
This case went to court. The judge ruled on August 24 that the Board of Governors of the FED must make this information public no later than August 31.
On August 26, the FED asked the judge not to enforce her ruling. Why not? Because it would be bad for the banking system. She had heard that argument before.
Well, what else? The Board of Governors' lawyer insisted that the Board has no knowledge of what the New York FED – its legal agent – really does. The lawyer said, "We don't control the system of record-keeping in New York." She insisted that the Board of Governors just cannot find out what the New York FED did with the money in time to meet the deadline.
Apparently, the Board of Governors, a government agency, has taken seriously Jesus' words regarding charity (alms):
But when thou doest alms, let not thy left hand know what thy right hand doeth: That thine alms may be in secret: and thy Father which seeth in secret himself shall reward thee openly (Matthew 6:3–4).
The two FEDS, the government one and the private one, were surely involved in the charity business, to the tune of a trillion dollars or so. This was a system of handouts on an unprecedented scale.
The Father in Washington has surely rewarded the FED in the past. The FED expects more of the same in the future. But now this pesky lawsuit forces an opening of the books.
Is the lawyer's argument credible? Perhaps the judge will not regard it as credible. So, the FED had another argument. The FED wants her to wait until the case can be heard on appeal. But there was a hitch. The FED did not say when it intends to appeal.
Here is the FED, with a court ruling against it, and with the clock ticking, admitting that it has no date set to file an appeal. Its lawyers apparently had no fall-back position. Is this credible? Of course not.
Will it work? We shall see. If it does work, and if H. R. 1207 remains bottled up in committee, the growing army of people who have finally found out about the FED will have two more pieces of evidence that the U.S. government does not run the FED.
If the bill passes the House and the Senate, Obama will veto it. The FED is not going to be audited by the government. That is not how the world works. The FED is only officially under government authority. Except in wartime, it has never been under government authority. It was set up to provide the illusion of government control. That illusion has worked since 1913.
The FED does face a major problem. If it escapes from both the Congress and the courts, this will sell lots more copies of "End the Fed." On the other hand, if the court system finally forces the FED to reveal who got what and on what terms, then banks in the future will hesitate to go to the FED, hat in hand, because the public learn who was begging for a bailout. This is not the sort of information that big bank bankers want the financial press to discover, let alone the Internet.
The handouts went to the big banks. Most banks were ignored. They were allowed to sink or swim. This has created a problem: bank bankruptcies every weekend for as far as the eye can see.
416 PROBLEM BANKS
The Federal Deposit Insurance Corporation, flush with a $30 billion loan from Congress, has announced that its list of problem banks climbed in one month from 305 to 416. The list is secret, of course, for the same reason that the New York FED's list is secret. The FDIC does not want to cause a run on any of the 416 banks.
A bank run these days takes the form of wire transfers and checks written to other banks to open an account. The money supply remains constant. Some banks lose; others win. The bad banks go bust.
The FDIC then has to buy up all of their bad assets. Solvent banks then buy the good assets. The big winners are the solvent banks that buy their rivals' assets at fire-sale prices. The big losers are taxpayers and investors who believe that all of the Treasury debt that Congress must sell to cover its loan to the FDIC will be repaid in real money some day.
On August 27, the FDIC announced that its member institutions lost $3.7 billion in the second quarter of 2009. In a press release that was reminiscent of "Spin City," the head of the FDIC, Sheila Bair, announced:
"While challenges remain, evidence is building that the U.S. economy is starting to grow again," said FDIC Chairman Sheila Bair. "Banking industry performance is – as always – a lagging indicator. The banking industry, too, can look forward to better times ahead. But, for now, the difficult and necessary process of recognizing loan losses and cleaning up balance sheets continues to be reflected in the industry's bottom line."
Translation: "The economy is better off than the banks are, and the economy remains in the pits. Why? Because banks are not lending. Someday, things will turn around for the banking system as a whole, but don't get your hopes up. Cleaning up bank balance sheets these days is comparable to cleaning up the Augean stables, for all you classics buffs out there."
Chairman Bair went on to say, "The FDIC was created specifically for times such as these. No matter how challenging the environment, the FDIC has ample resources to continue protecting depositors as we have for the last 75 years. No insured depositor has ever lost a penny of insured deposits...and no one ever will."
Translation: "Congress may have to fork over another couple of hundred bullion – maybe $500 billion, if Senator Dodd's bill is signed into law – but no one will ever lose a penny in an FDIC-insured bank. But taxpayers will pay a pretty penny to whoever buys all those T-bills that Congress will have to issue to keep the FDIC solvent."
The press release reported the following.
1. Total assets of insured institutions declined by $238 billion.
2. The number of institutions on the FDIC's "Problem List" rose. At the end of June, there were 416 insured institutions on the "Problem List," up from 305 on March 31.
3. Total reserves of the Deposit Insurance Fund (DIF) stood at $42 billion. [No mention of the $30 billion loan from Congress to get reserves back up.]
How bad is this number: 416 problem banks? Not as bad as 1882 problem banks. That is the estimate of Institutional Risk Analytics, a private research firm. The organization gave a grade of F to 1882 banks, as of June 30. This figure was up by 16.5% since late March.
What about the number of A-rated banks? The number was down by 21% since late March.
This list does not include the 19 big banks that went through the stress tests, which all of them passed. The stress tests assumed that big banks would have enough capital to withstand a 9% loss rate over the next two years. The problem is, according to the company's managing director, that we are already at 9% loss rates, and we are not yet at the bottom of the cycle. If the economy does not recover by the 4th quarter, banking statistics will head down in 2010. (http://tinyurl.com/nr2z67)
The Federal Reserve System intervened to save the financial system in 2008. But has the system as a whole recovered? No. Has unemployment stopped rising? No. Has the economy recovered? No.
GROWING HOSTILITY TO THE FED
Always in the past, the Federal Reserve has remained free from serious criticism. The media are obedient lap dogs. So are the academic economists. The textbooks never point out that the FED is the enforcing arm of a huge cartel. The professors refrain from applying to the FED their analyses in their chapters on cartels.
Today, for the first time, there is a growing audience of intelligent people who are being exposed to the truth about the FED. This has taken place outside Establishment channels, which includes the largest talk radio shows.
The FED has had a 90-year free ride. That ride is over. The FED will never again get off scot-free. The Web is sufficient to continue to inform people regarding the economic disasters that the FED has caused by its anti-recession, big-bank bailout policies.
Bernanke is pursuing the same low-interest rate policy that Greenspan pursued from mid-2000 to mid-2004. A few mainstream critics of Greenspan now say that his policy failed. But they refuse to say that Bernanke's policy is the same, and that the resulting crises will be worse.
The critics do not see the operations of the FED in terms of a consistent theory of monetary cause and effect. They view monetary policy as somehow based on the personality of the Chairman. Before, Greenspan was "the Maestro." Bernanke is "the Professor." The policies are the same: pump and dump. The FED pumps up the money supply, and the Treasury dumps T-bills and T-bonds on the FED.
The FED has promised to unwind its doubled monetary base (balance sheet) when the economy revives. In recent months, it has sold off some debt. The monetary base is down from its peak. The Treasury has been able to sell its debt to investors who still dear the economy. This cannot go on for more than a year unless the economy stays in recession. The size of the deficits will be too great.
The FED really is trapped unless the economy revives, commercial bank credit to private industry revives, and price inflation remains low. But a revival of commercial bank lending will turn the FED's monetary base into spendable money. The M1 money supply will double. The M1 money multiplier will go positive. At that point, the FED will have to unwind, meaning sell off assets. To whom? At what interest rate? It will be in competition with both the Treasury and Fannie/Freddie.
CONCLUSION
The FED has never had to play defense. It has had a free ride. The free ride is over.
The general public has still not heard of the FED. The FED still has the advantage of invisibility. But it is losing that invisibility. This is not going to change.
The FED is a legitimate target for people who think the government botches the economy. It is the classic example of the much-praised government-business alliance. It is the consummate model of that alliance. When it fails to achieve its twin official goals of low unemployment and low price inflation, millions of its economic victims will figure out who the culprit is.
End the Fed.
August 29, 2009
Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 20-volume series, An Economic Commentary on the Bible.
Monday, August 31, 2009
Forced Vaccinations
The United States of America is devolving into medical fascism and Massachusetts is leading the way with the passage of a new bill, the “Pandemic Response Bill” 2028, reportedly just passed by the MA state Senate and now awaiting approval in the House. This bill suspends virtually all Constitutional rights of Massachusetts citizens and forces anyone “suspected” of being infected to submit to interrogations, “decontaminations” and vaccines.
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| The entire population of the USA is now but one pen stroke away from being subjected to mandatory swine flu vaccinations at gunpoint. | |
It’s also sets fines up to $1,000 per day for anyone who refuses to submit to quarantines, vaccinations, decontamination efforts or to follow any other verbal order by virtually any state-licensed law enforcement or medical personnel. You can read the text yourself here: http://www.mass.gov/legis/bills/sen…
Here’s some of the language contained in the bill:
(Violation of 4th Amendment: Illegal search and seizure)
During either type of declared emergency, a local public health authority… may exercise authority… to require the owner or occupier of premises to permit entry into and investigation of the premises; to close, direct, and compel the evacuation of, or to decontaminate or cause to be
decontaminated any building or facility; to destroy any material; to restrict or prohibit assemblages of persons;
(Violation of 14th Amendment; illegal arrest without a warrant)
…an officer authorized to serve criminal process may arrest without a warrant any person whom the officer has probable cause to believe has violated an order given to effectuate the purposes of this subsection and shall use reasonable diligence to enforce such order. [Gunpoint]
(Government price controls)
The attorney general, in consultation with the office of consumer affairs and business regulation, and upon the declaration by the governor that a supply emergency exists, shall take appropriate action to ensure that no person shall sell a product or service that is at a price that unreasonably exceeds the price charged before the emergency.
“Involuntary Transportation” (also known as kidnapping)
Law enforcement authorities, upon order of the commissioner or his agent or at the request of a local public health authority pursuant to such order, shall assist emergency medical technicians or other appropriate medical personnel in the involuntary transportation of such person to the tuberculosis treatment center.
$1,000 / day in fines
Any person who knowingly violates an order, as to which noncompliance poses a serious danger to public health as determined by the commissioner or the local public health authority, shall be punished by imprisonment for not more than 30 days or a fine of not more than one thousand dollars per day that the violation continues, or both.
Forced vaccinations
Furthermore, when the commissioner or a local public health authority within its jurisdiction determines that either or both of the following measures are necessary to prevent a serious danger to the public health the commissioner or local public health authority may exercise the following authority: (1) to vaccinate or provide precautionary prophylaxis to individuals as protection against communicable disease…
Forced quarantine for those who refuse (illegal imprisonment without charge)
An individual who is unable or unwilling to submit to vaccination or treatment shall not be required to submit to such procedures but may be isolated or quarantined pursuant to section 96 of chapter 111 if his or her refusal poses a serious danger to public health or results in uncertainty whether he or she has been exposed to or is infected with a disease or condition that poses a serious danger to public health, as determined by the commissioner, or a local public health authority operating within its jurisdiction.
Arrest for refusal to be “decontaminated”
If an individual is unable or unwilling to submit to decontamination or procedures necessary for diagnosis, the decontamination or diagnosis procedures may proceed only pursuant to an order of the superior court… During the time necessary to obtain such court order, such individual may be isolated or quarantined pursuant to section 96 of chapter 111 if his or her refusal to submit to decontamination or diagnosis procedures poses a serious danger to public health or results in uncertainty whether he or she has been exposed to or is infected with a disease or condition that poses a serious danger to public health.
Interrogation
When the commissioner or a local public health authority within its jurisdiction reasonably believes that a person may have been exposed to a disease or condition that poses a threat to the public health, in addition to their authority under section 96 of chapter 111, the commissioner or the local public health authority may detain the person for as long as may be reasonably necessary for the commissioner or the local public health authority, to convey information to the person regarding the disease or condition and to obtain contact information… If a person detained under subsection (1) refuses to provide the information requested, the person may be isolated or quarantined pursuant to section 96 of chapter 111 if his or her refusal poses a serious danger to public health…
Forced isolation and quarantine
An order for isolation or quarantine may include any individual who is unwilling or unable to undergo vaccination, precautionary prophylaxis, medical treatment, decontamination, medical examinations, tests, or specimen collection and whose refusal of one or more of these measures poses a serious danger to public health or results in uncertainty whether he or she has been exposed to or is infected with a disease or condition that poses a serious danger to public health.Forced entry into any home or building…
There’s a lot more in this bill, including language that allows Mass. police to enter any home or building without a search warrant, to destroy any object or building they suspect may pose a threat to public safety, to order the closing and / or decontamination of any facility using highly toxic chemical decontamination agents, and to arrest, detain and interrogate anyone who gets in their way.
Meanwhile, all state law enforcement and medical personnel are granted complete immunity from prosecution for their part in violating your Constitutional rights. So if they violate your right to due process, or they accidentally destroy your home, or they kill your family dog because they suspect it might be infected, you have absolutely zero recourse.
Under this bill, Massachusetts becomes a medical police state. There is no debating it. It’s all written, clear as day, in this law: The citizens of Massachusetts will have no rights, period. The Constitution is ancient history. You are now the property of the State.
Kiss your freedoms goodbye
Massachusetts, it seems, has never met a vaccine it didn’t like. This is the same state that rounded up the parents of schoolchildren who hadn’t been vaccinated, then corralled them into a courtroom (with attack dogs standing guard outside) and forced vaccine injections onto all the schoolchildren under the threat of jail time for parents who resisted.
Remember, readers, that this is all taking place in the “land of the free,” a nation that former President George Bush claimed was so envied around the world that terrorists attacked America because they “hate freedom” and wanted to destroy our way of life. But terrorists need no help attacking freedom as long as Massachusetts is in the vaccine game, because this latest form of “gunpoint medicine” destroys freedom for everyday Americans in a way that terrorists could have never hoped to accomplish with all the bombs in the world.
Massachusetts, it seems, has done what terrorists could not: It has turned “free” Americans into medical slave subjects who no longer have any freedom to decide the details of their own medical care. All options have been stripped from them but one: The Big Pharma option. That’s the one that involves using untested, unproven and potentially dangerous vaccines that could paralyze you or even kill you. All to defend you against a virus that’s so weak, almost anyone with decent levels of vitamin D and basic nutrition can resist the virus without incident.
But Massachusetts, as you’ll see below, is just the beginning. It turns out that the whole nation could soon find itself under a similar forced vaccination policy…
Isolation camps, forced vaccinations and more
In 2006, former President George Bush signed into law the Public Readiness and Emergency Preparedness Act (PREP). It gives power to the Secretary of the U.S. government’s Health and Human Services department (HHS) to declare any infectious disease a “national emergency” and therefore require mandatory vaccination of the entire population. Because of the existence of this PREP Act, the entire population of the USA is now but one pen stroke away from being subjected to mandatory swine flu vaccinations at gunpoint.
Those who resist such vaccines will be arrested and taken away for “isolation” in domestic prison camps. They can’t just leave vaccine refusers free to live among the population, of course, because that would send the message that anyone can refuse the vaccines without consequence. So they’ll arrest those who refuse the vaccine, labeling them “a threat to national security” (enemies of the state) and imprison them without trial, without charges and without any legal representation whatsoever.
Meanwhile, all those who take part in enforcing these crimes against the American people will be granted complete immunity. From the HHS website: “[the Secretary may] issue a declaration… that provides immunity from tort liability (except for willful misconduct) for claims of loss caused, arising out of, relating to, or resulting from administration or use of (vaccine or other pharmaceutical) countermeasures to diseases, threats and conditions determined by the Secretary to constitute a present, or credible risk of a future public health emergency…”
There are other laws already on the books that strip Americans of virtually all Constitutional rights in a “pandemic emergency” scenario. One such act is The Pandemic and All-Hazards Preparedness Act (S. 3678), which probably merits another article altogether.
Have no illusions: At the stroke of a pen, the Constitutional rights of all Americans will be immediately suspended. Mandatory vaccinations and “decontaminations” will kick in and the mass arrest of resisters will begin. There will be no court, no trial, no jury and no due process. Your actions will be dictated to you by a law enforcement officer or a health care worker who has been granted complete immunity, so if you just happen to get kicked around a bit (or shot), there’s really nothing you can do about it.
Some might argue these are necessary actions to save a nation from a deadly pandemic. And yet they forget that the pandemic has been intentionally allowed to worsen by censoring information about vitamin D and natural remedies that could stop it. Somebody at the top, in other words, wants this pandemic to get really bad, perhaps because it allows them to invoke precisely the draconian response I’ve outlined in this article. Seizing power in a Democracy cannot be accomplished by simply declaring war on the rights of the People. Rather, a situation must be engineered where the People are so desperate that they beg to be controlled. Releasing a pandemic into the wild is the perfect way to accomplish precisely that.
Timing
None of these laws will be invoked before the vaccines are ready in large numbers, of course. Part of the purpose in all this is to prop up Big Pharma profits with massive vaccination efforts, so until the vaccines are actually available, don’t expect to see any declarations of a public emergency.
It might take until October or November before the vaccines are readily available in sufficient quantity to inject just half the U.S. population. But once that milestone is reached, a declaration of a pandemic emergency is imminent. Trust me on this point: They won’t let all those hundreds of millions of vaccines sit around unused; they’ll make sure they get injected into the People as soon as possible, because that’s the only way to justify making more.
So the sequence of events we’re likely to see here are:
#1) Waiting on vaccine manufacturing to procure at least 150 million doses in the U.S. Probable timeframe = October.
#2) Hyping up a few local swine flu breakouts in schools in order to justify step #3. Probable timeframe = November / December.
#3) Declaring a full-blown national emergency and announcing mandatory vaccinations for everyone (to use up the vaccines that are now available). Probable timeframe = January / February / March.
#4) If the disease continues to spread, this is when you’ll see forced entry into homes and buildings, forced “decontamination” sprayings, widespread arrests and forced quarantine of resisters, Martial Law and a complete crackdown on freedoms (especially in the inner cities). This will likely continue through the winter until Spring arrives, bringing the sunshine that will suppress the virus around the May 2010 timeframe.
All this is written in black ink. It’s already part of the pandemic response plan. Body bags, FEMA camps and much more.
Two years ago, this was all the domain of conspiracy theory “wingnuts.” Now it’s State law. Now it’s being openly discussed in security conferences and health care meetings. What will we do when the hospital beds are full? How will we accomplish the “involuntary transportation” of those who are infected? Are there enough zip-tie handcuffs to go around? How do we disarm and arrest citizens who refuse to be vaccinated? How do we prevent National Guard troops from becoming infected themselves?
These are the questions circulating now at high levels, all across the world. And the answers are always the same: Abandon freedoms. Strip the People of any rights. Dictate from the top down and arrest anyone who gets in your way.
Welcome to the Land of the Free. I hope you are prepared for what looks to be coming, because this isn’t America anymore, folks. This is Amerika, and the Constitutional rights you thought you had are about to be written right off the books.
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