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 THE LIBERTARIAN ENTERPRISE Number 592, October 17, 2010 "Taxation is theft. Taxation is slavery. And taxation is the fuel of war."
Special to The Libertarian Enterprise The Federal Reserve uses euphemistic smoke and mirrors to obscure their operations. With full knowledge the following is not the way the Fed/government describes the system, allow me to offer a different analysis of their mathematical operation. Congress can pay for federal expenses with funds collected from taxes, but Congress is never satisfied with this amount. The desire to buy votes/campaign contributions from special interest groups induces congress-critters to spend more, and this is identified as deficit spending. To create this make-believe money requires the assistance of the Federal Reserve. Approximately 45% of the 2009 budget was paid by new fiat money. Congress will give the Fed a security (bill, bond, or note) and the Fed will accept the document as an asset of one of the twelve FR Banks. The Fed will then establish a line of credit for the U.S. government for the same amount and list the liability as Federal Reserve Notes. Voila!! Fiat money has just been created for Congress to spend. Ref: 2009 Annual Report to Congress by the Board of Governors, page 448. The accumulated securities that are not redeemed add up to the national debt. The fiat money is identified as a legal tender. A "legal tender" is something that is required by law to be accepted as payment for a debt—it is compelled satisfaction for, but not payment of, the debt. The public debt is now over $13 trillion, or over $40,000 for every man, woman, and child in the U.S. The value is $200,000 per person if the unfounded debt is included. Through no action of his own, or even an opportunity to reject the imposition, every resident of the United States has become obligated for a debt—for life—that cannot be relieved. It is manifestly clear that an obligation of $40,000 can only be visualized as an unrestricted claim on the future earnings of the citizenry. The citizen has been reduced to an indentured servant, or slave, compelled to work for the company store and still face an ever increasing amount of debt. There is no possible relief. If the earnings of a citizen are properly subject to confiscation by taxation, the government can take the entirety and return what pittance Congress in their largess may bestow. A nation of sovereign people is being reduced to haves and have-nots; the middle class is being eliminated by taxation. If the Fed retained all of the securities, the public would quickly complain that interest payments (approximately $400 billion annually) are of no benefit and the inflationary pressure would also be obvious. The Fed therefore wants to sell a major portion of the securities so it has arranged with the Treasury department to act as auctioneer for selling to the Primary Dealers. The PD submit sealed bids. Since the security has a fixed face value and interest rate, the higher the bid, the lower the interest rate for the buyer. The Primary Dealers are branches of the huge international banks/finance centers. Seven Wall Street agencies include Bank of America, Citigroup, J.P. Morgan, Morgan Stanley, Goldman, Jefferies, and Fitzgerald. Foreign agencies of Barclays, HSBC, Credit Suisse, UBS, Deutsche, BNP Paribas, RBS, Daiwa, Mizuho, Nomura, and RBC of Canada are also included. Whether these are the entities that Bloomberg is attempting to identify by FOIA as recipients of bail-out funds that is now in the 2nd Circuit Court of Appeals remains to be seen. The Fed recently obtained $700 billion bailout funds. It begged Congress, on actual bended knee, for money and Congress gave them $700 billion in securities and the Fed swapped the securities to GSE/international bankers for toxic MBS's. The Annual Report lists Assets of $776 billion securities and $908 billion Government Sponsored Enterprise Mortgage Backed securities out of $2.2 trillion total assets. Whether the bailout money was a quid pro quo with the PD to avoid lawsuits for fraud is beyond the scope of this writing. The Mafia does not lightly tolerate transgression. The continued mutual benefit of programs, paid for by taxpayers, should evidence Wall Street and the Fed/international bankers constitutes a Siamese twin. The touted concept that the Treasury's auction is used to obtain money for Congress to spend is a cleverly designed disinformation. How can the government sell trillions of dollars of securities if the money is not already in circulation? Such a methodology cannot conceivably create fiat money in the hands of citizens to buy the securities to fund Congress. The initial beneficiary of the securities must be Congress—not the people. The math is going to get more detailed. If the Fed sold all of the securities at face value, there would be no money left in circulation. The money that was created by the securities would all be taken out of circulation and returned to the vaults of the Fed. The operation is identical to the FOMC selling or buying of securities to alter the amount of money in circulation. The value of any securities not sold by the Fed is still in circulation and becomes the Reserves for commercial banks. The Reserves (known as base money) are then multiplied via loans from commercial banks utilizing the fractional reserve practice. The Fed currently holds about $750 billion of $12.5 trillion issued securities. JFK, and the Unspeakable by James Douglas. In 1790 during Congress' consideration of Alexander Hamilton's proposal to pay the national debt with a usury based obligation placed upon the citizens, congressman James Jackson, after lengthy reflection on the devastation similar plans had imposed on European countries and cities, included the following observations to Congress: "Let us take warning by the errors of Europe, and guard against the introduction of a system followed by calamities so universal... The funding of the debt will occasion enormous taxes for the payment of the interest... (such a system) must hereafter settle upon our posterity a burthen (sic) which they can neither bear nor relieve themselves from." Ref. ANNALS OF CONGRESS, Vol. 1, 1790, pp. 1141-2. In actual practice within the United States, a collection of taxes for part of the government spending is well known. Payment of part of the government expenses by taxation does not alter the government's usury program; for analytical analysis, they can stand alone. The current pattern of increasingly larger deficit spending is the escalation as the climax of chaos beyond description approaches.
Dr. Bob Blain, Emeritus Professor of Sociology at Southern Illinois University, Edwardsville, in a published paper "Revisiting U.S. Public and Private Debt" released in 2008 observes the exponential increase in national debt from 1915 and the destruction inflicted upon historical societies by usury based monetary systems. Fatal Embrace written by Benjamin Ginsberg documents historic occasions in which a usury debt based economic system (but not so identified) resulted in the "financiers" facing public fury including deportation, confiscation of estates, and physical harm to the individuals involved. Greenspan's Bubbles; The Age of Ignorance at the Federal Reserve written by Bill Fleckenstein reveals how the Fed suppressed Federal Fund interest rates to create a false prosperity that devastated the economy for 20 years and destroyed the home construction industry. This Time is Different; Eight Centuries of Financial Folly written by Carmen Reinhart & Ken Rogoff reviews defaults as seen by an economist speaking to the International Monetary Fund/World Bank. It is the nature of governments to steal from the people.
TLE AFFILIATE
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