Liberty Maven

…and why it both does and does not matter.

by Jake, the Champion of the Constitution
Originally published Wednesday, February 11, 2009 at http://www.nolanchart.com/article5976.html

CARTEL – n. a combination of independent commercial or industrial enterprises designed to limit competition or fix prices (per Merriam-Webster’s Dictionary) (emblem)

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adult: “Our government borrows money every year.”

child: “Where does the money come from? How can we always be in debt and not have to pay it off?”

adult: “We are in debt to ourselves.”

child: “That doesn’t make any sense!”

adult: “It is based on fractional reserve banking. Banks do not have to have all the money that they lend.”

child: “That sounds silly! And why is the government bailing out the banks? Don’t the banks already have all the money?”

adult: “The banks lent all their money to us, so they need more money from the government so they can continue lending to us.”

child: “I still don’t understand.”

adult: “You’ll understand it when you get older.”

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As we continue, I hope many of the “adult’s” fallacies in the above dialogue are becoming clearer, especially after “The Money Matrix – How the FED Works (PART 6/15).” As always, please feel free to leave any feedback or questions below.

So, who owns the Federal Reserve? Well, it certainly is not the US government, as many would suppose. In fact, I have found that quite a few – including myself last year – who are roughly aware of how the FED works but believe that the owners of the FED is a secret. Well, it is not. The FED’s Purposes and Functions (page 21/146) reads:

“As of March 2004, of the nation’s approximately 7,700 commercial banks approximately 2,900 were members of the Federal Reserve Systema – approximately 2,000 national banks and 900 state banks. Member banks must subscribe to stock in their regional Federal Reserve Bank in an amount equal to 6 percent of their capital and surplus, half of which must be paid in while the other half is subject to call by the Board of Governors. The holding of this stock, however, does not carry with it the control and financial interest conveyed to holders of common stock in for-profit organizations. It is merely a legal obligation of Federal Reserve membership, and the stock may not be sold or pledged as collateral for loans. Member banks receive a 6 percent dividend annually on their stock, as specified by law, and vote for the Class A and Class B directors of the Reserve Bank. Stock in Federal Reserve Banks is not available for purchase by individuals or entities other than member banks.”

So, the owners of the FED are simply other national and state banks.  What is rather interesting is that this is no normal company stock!  First, they are paid a perpetual annual dividend of 6% per the Federal Reserve Act of 1913 which is not a “law” in the technical sense that the FED implies.  Second, apparently this “stock” is part of each member bank’s balance sheet as only have is “paid in” to the FED and the “other half is subject to call” by the FED.  While many become quite alarmed by the mandated 6% dividend paid, please understand that this is just a small babbling brook when compared to the powerful monetary torrents of fractional reserve banking and FED Open Market Operation’s money creation/destruction as explained in Part 6.

[Side note The FED also has a similar FAQ blurb online here. I have several emails pending at various Reserve branches inquiring as to whether the actual lists of the member banks can be shared with me. If I have any luck, I will update this article and then proceed to ask the FED to share the size and number of shares for each member bank, which I imagine will not be shared with me, but you never know!  A partial list of the New York district member banks was acquired here in 2004 by Ed Steer.]

Why do the owners of the FED not matter?

Well, as stated, the member banks have no ownership or decision-making rights as the shareholders of a corporation would. Their sole privilege is to influence the selection of several of the Reserve Bank division’s directors who in turn may have a chance to influence a rotating chair on the FOMC (Federal Open Market Committee) or appoint the Federal Advisory Council. As seen in the below diagram, this is not much power at all.

So, why does who owns the FED matter?

Well, no American citizen, nor the American government, nor any other non-bank entity or corporation for that matter, can purchase stock. The FED is truly a “bank of banks” ruled by a small oligarchy of prominent central bankers. Ben Bernanke is just the current ringleader paraded out to the public. Given the vast power of the FED as explained in the last article, this piece, and in the next upcoming article, I can claim with confidence that the Federal Reserve is a banking cartel. It has a monopoly over the money supply and credit of the United States. It is at best an unconstitutional quasi-governmental entity setup by the Federal Reserve Act of 1913. Note the lack of limits the government has on auditing or overruling the FED.

• “Monetary policy is exempt from audit by the Government Accountability Office.” - (page 15/146)
• “The Federal Reserve is an independent agency, and that means, basically, that there is no other agency of government which can overrule actions that we take.” - Alan Greenspan when asked by Jim Lehrer about the FED’s relationship with the President.

There are those who would argue that my claim that the FED is too powerful – let’s not forget Congress and the Treasury! – must be false since the banks are presently adamantly refusing to extend credit after being given taxpayer money and the FED’s newly created money. My reply is a far better question is why hasn’t this “bank of banks” forced its member banks to lend in this current downturn?

For the Republic,

Jake, the Champion of the Constitution

[Reach the Author Here!] www.CampaignForLiberty.com www.EndTheFED.us (Banner courtesy Mike Burke)

- Morcheeba, “Enjoy the Ride” In many ways, the world in which we now live is a product of the “ride” our money masters have chosen to give us by their actions. What happens if enough of us want to get off?

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We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

As always, unlike the NFL, the author grants full permission to allow any accounts of, rebroadcasts, retransmissions, repostings in part or full of this article to your blog or anywhere else in order to promote the Restoration of our Republic.

Veritas numquam perit. Veritas odit moras. Veritas vincit. Truth never perishes. Truth hates delay. Truth conquers.

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Nolan Chart Facebook Group Page Created

Summary of Articles and Bibliography for Jake, the Champion of the Constitution (1/1/2009)

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The Money Matrix Series

1. America, Were Michael Phelps’ Eight Olympic Gold Medals Worth Winning?
2. The Money Matrix – Prelude (PART 1/15)
3. The Money Matrix – What is a Dollar Bill Worth? (PART 2/15)
4. The Money Matrix – What Makes Money Money? (PART 3/15)
5. The Money Matrix – What is Honest Money? (PART 4/15)
6. The Money Matrix on the Grand Deception of Seigniorage (PART 5/15)
7. The Money Matrix – How the FED Works (PART 6/15) (A must-read, this article’s content is important as I haven’t seen its information compactly put together in one place)
8. The Money Matrix – What the Heck Are Derivatives? (PART 10/15)
9. Save Ron Paul’s Voice – A Money Matrix Addendum
10. A Money Matrix Addendum: Citigroup and GATA Call for an End to the Suppression of the Gold Market
11. MY PROPHECY – The Federal Reserve Will End! A Money Matrix Addendum

Bernanke’s Great Lie – The “Gold Standard” and the Great Depression (PART 2/2)