Thoughts on Banks and the Federal Reserve

Federal Reserve Notes are not dollars, and are a violation of the United States Constitution. This may seem to be an extreme statement to those who have not been in the patriot movement for a while, but it is all documented and easily provable.

I covered the concept of real money (precious metal coins) versus fiat/paper money on this blog on July 10, 2016 with the post entitled What is Money? I recommend my new readers check out that post in my archives. As I will assume that my readers know what true money is, this post will only cover banking. I shall here focus on concepts, not the minutiae of banking history in the U.S.

Paper money and the “legal tender” laws that accompany it are a legal fraud. When someone must be forced to take something as payment, then you have valueless “money”. America has had several horrible experiences with paper money, and yet we as a nation have not learned.

The different colonies issued paper money before and during the Revolution, and it all inflated. Likewise, the Continental Congress issued paper money during the American Revolution, and it inflated so wildly that the term “not worth a continental” came in to being. The Continental Congress even chartered a bank called the Bank of North America.

The U.S. Constitution, written in 1789, specifically stated that Congress held the power “To coin Money, regulate the Value thereof, and of foreign Coin” (Article 1 Section 8 Clause 5). In consonance to this, the U.S. Constitution Article 1 Section 10 stated that no state shall do any of a list of things, including the following: “coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in payment of Debts”. It is perfectly clear that only gold and silver coins were to be money in the U.S.A. There were no American government issued paper “dollars” from 1789 until Abraham Lincoln’s War of Northern Aggression.

An individual, business corporation, or private bank may issue script, that is to say, private paper money. This script is not legal tender and no one may be forced to take it for anything.

Banks in the early days of the American republic issued “bank bills”, private paper “money” which could also be called “bills of credit”, “bank notes”,  and “script”. People were not forced to receive this as payment for goods or services and the government did not have to accept this private paper money for payment of taxes. Bank notes redeemable into real money (gold and silver coin) set the stage for the irredeemable (valueless) paper money of today –such as FRNs.

Now on to banks. A bank is a government chartered corporation whose purpose is to make money by issuing interest bearing loans (usury). A bank is a for profit business. Banks as we know them may have arisen out of the goldsmiths of the Middle Ages, who would secure wealthy people’s gold in their safes. A bank is no different from a store; it has overhead expenses and payroll to meet. Banks only pay a small interest to depositors so that they will have money to lend out at a higher rate of interest. In a sense, a bank is a legal racket.

Here is where the subject becomes twisted. If a national government charters a national bank, then that bank has more prestige in the eyes of citizens, may have branches outside of the state where it is based, and may receive special favors from the government (such as holding government assets that they may use as assets to make loans backed by, and by the government taking their script for payment instead of gold and silver coin).

The Constitution does not forbid the states from chartering banks, but the states are forbidden from making the bank script/paper “money” a legal tender. Whether or not the U.S. Constitution grants the national government the authority to charter a national bank is debatable. The power is not expressly given to the U.S. Congress, but some argue that is included under the necessary and proper clause. (As a Jeffersonian “strict constructionist” I hold that the congress does not have the power to charter a bank). Regardless of whether or not the Congress has the power, it is debatable as to whether or not it is wise to use it.

Let me further clarify the issue of banks and fractional reserve banking to my readers. By being paid a small rate of interest on their deposits, people desirous of gain (usury) deposit their money in banks. Banks then lend out this money at a higher rate of interest than they pay to their depositors, so that the bank makes money. However, the fractional reserve system takes this farther.

Fractional reserve banking cannot exist without the bank notes/bills known as paper money. The concept of fractional reserve banking is that the government that charters the bank legally requires the bank to only keep a certain specified percentage of its assets on hand for redemption of its notes. This allows them to issue loans than they have money to redeem. This means that they create money out of thin air, money that they demand repayment of with interest. What an immoral fraud!

By classifying not only deposits, but also the money required to be repaid by loans as an “asset”, these banks loan out much more money than they ever had. Obviously if more people attempt to withdraw their savings than the bank has reserves to pay out, then the bank is insolvent and must close its doors, or be bailed out by the government that chartered it. By “bailed out by the government”, it should be clear to my readers that it is really being bailed out by taxpayer money. Thus, everyone loses money instead of just those who played the deposit and loan finance game with the insolvent bank. If too many people default on their loans simultaneously, then the bank loses enough revenue that it cannot pay interest on its deposits and likewise becomes insolvent.

When you see a system where many more bank bills/bank notes/paper “money” and loans are issued than reserves can make good, you have a system destined to eventually collapse. When banks do this, they create a situation that requires more money for redemption than actually exists. When payment of interest on loans requires more money than there was in the first place, where does this money come from? Likewise, how does one pay back money that was created out of thin air by fractional reserve banking schemes? When there are more debts than there are assets, then they can only be paid off by creating more fake money and issuing more loans to bring in more fake money.

When all money is created by and backed by debt, then the theoretical repayment of all debts would cancel out all money. When assets repay the loans at the bank, the “money” ceases to exist. Paper money and fractional reserve banking only exist because of ignorance and greed. When this greed runs wild long enough, banks eventually become insolvent when people cannot pay their loans or take out new ones. Then the charade is over.

The current national banking system of our federal government came about with the creation of the Federal Reserve System in 1913. As superbly documented in Eustace Mullin’s Secrets of the Federal Reserve and G. Edward Griffin’s work The Creature from Jekyll Island, the Federal Reserve Act was a plan set in place by the Rothschild financial dynasty and their fellow Jewish bankers. They also employed gentile front men, such as senator Nelson Aldrich, the Rockefellers, and J.P Morgan, but Rothschild ran the operation.

The conspiracy to create the Federal Reserve was laid out at the elite Jekyll Island resort, hence the catchy title of Griffin’s book on the subject. The Jewish Rothschild banking dynasty -with their Jewish lieutenants Paul Warburg and Kuhn, Loeb, and Company and the help of gentile “assets” such as Morgan and Rockefeller, managed to get a central banking act passed that created a central bank known as the Federal Reserve. The Federal Reserve is a corporation chartered by Congress, and the president appoints its director; however, it is privately owned and operated for private profit. Yes my readers, the Federal Reserve is not federal and does not have reserves of gold or silver to redeem it worthless FRNs. The Federal Reserve enjoys the business of the U.S. Treasury, and its Federal Reserve Notes (FRNs) were unconstitutionally declared to be legal tender for all debts public and private. FRNs are redeemable in nothing but other paper FRNs.

The Federal Reserve “monetizes” debt and facilitates federal government spending by “buying” the federal government’s bonds and paying for them with newly printed FRNs. These FRNs, created out of thin air, are backed by the promised repayment of the debt they were created by! The government spends these valueless FRNs at it pleases, often selling new bonds to the Federal Reserve to receive new FRNs to pay off the old bonds! What a clever little racket. How devious, how twisted, how Pharisaical!

As FRNs are actually valueless, they are only accepted as payment because of federal law. They are “money” by force, not by consent. If the U.S. federal government were conquered by another country, suffered internal collapse, or decided to institute a new monetary system –then FRNs would be valueless, worth no more than toilet paper. However, in any of the aforementioned three scenarios, silver and gold coins will still have value and be useful to those who have them.

As the Federal Reserve prints more valueless, debt backed, paper money, merchants and the public realize that there is a greater amount of paper to purchase the same quantity of goods. Thus, prices rise to compensate for the devaluing of the FRNs, often mistakenly perceived to be the devaluing of the dollar. Technically, prices do not rise; it is the paper money that devalues. Charging higher and higher prices for goods because of devalued paper currency is a losing game. At some point there will be hyperinflation, just as there was in Germany in the 1920s. Playing the paper money game in pursuit of illusory wealth, or even just the bare sustenance of life, cannot go on forever.

On a connected note, just as Jesus Christ rebuked the Jewish moneychangers while he was on earth, the problem remains. The rebellious tribe has pursued their favorite vocations of banking and commerce around the globe. There is a reason that the great English Magna Charta of 1215 had two provisions against Jewish money lenders. Financial trickery and enslavement, along with other evils such as subversion of the morals and culture of their host countries, are why Jews have been kicked out of many countries of Europe over the last 2,000 years. There is a reason why Rothschild has influenced -if not covertly ran- the money system of the U.S. federal government since they were foolish enough to charter a national bank. Jews also founded the banking firms Goldman Sachs and Lehman Brothers. There is a reason that the last three directors of the Federal Reserve System –Alan Greenspan, Benjamin Shalom Bernanke, and Janet Yellen- are Jews. The current assistant director of the Federal Reserve, Stanley Fischer, is not only a Jew, but a citizen of Israel and the former director of the central bank of Israel (and a member of the CFR and Bilderberg). When one studies the higher echelons of finance, one learns that it is as Kosher as a synagogue.

One cannot patch a severed artery with a band aid; at some point Americans are going to have to right their monetary system and return to the U.S. Constitution approved silver dollar. Otherwise, they will be slaves to the government and its banking system, slaves who depend on government approved, debt backed script to purchase their daily bread.

As I near the end of this essay, I trust that my readers have a much better understanding of money and banks than they received from public school history books and the media.

When one realizes what money is, what it is for, and how governments and banks manipulate it when given the chance -one’s entire worldview can change. People only play the paper money and fractional reserve banking game for two reasons: greed and fear.

Hard money morphed into redeemable paper which morphed into irredeemable (valueless) paper. Why did people allow this to occur? The answer is, at least in part, the following quote. I shall close with this quote from a letter a state senator named Condy Raguet wrote to an Englishman back in 1821, which is quoted in the second section of Ron Paul and Louis Lehrman’s book The Case for Gold:

“You state in your letter that you find it difficult to comprehend, why persons who had a right to demand coin from the Banks in payment of their notes, so long forebore to exercise it. This no doubt appears paradoxical to one who resides in a country where an act of parliament was necessary to protect a bank, but the difficulty is easily solved. The whole of our population are either stockholders of banks or in debt to them. It is not the interest of the first to press the banks and the rest are afraid. This is the whole secret. An independent man who was neither a stockholder or debtor, who would have ventured to compel the banks to do justice, would have been persecuted as an enemy of society…”

~Remember the Founders and the 14 Words~

Copyright © 2016 by Joseph Charles Putnam of Orange County, Indiana. All Rights reserved.

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Author: Joe Putnam

I am a Christian (Reformed/Sovereign Grace Baptist type), white American of Western European bloodline, advocate of an agrarian social order, Kinist, White Nationalist, admirer of America’s Founding Fathers and the Boys in Gray, homesteader, indie published author, and amateur historian. I have indie published several books, all of which are available from Amazon. I am a life long resident of rural Orange County, IN –in the part of the Upper South that many would term Greater Appalachia or the Dixie Frontier. In addition to my own blog, I am a contributor to the multi-author blog Identity Dixie. I am active in promotion of the Alt-South movement. In addition to my blog writings, I am currently gearing up for (at least) two more book projects –one theological and one historical. The theological one will cover the three interpretational views of Daniel’s 70th Week. I hope to have this book in print in late summer 2017. (Hint: I am, not a Dispensational Futurist). The historical book will be a biography of George Rogers Clark (1752-1818). Clark was a noted Virginia militia officer who’s campaigns, including his successful siege of Vincennes, basically took the Old Northwest from Britain during the American Revolution. Clark spent the rest of his life around the river that separates Clarksville, IN from Louisville, Kentucky. I hope to have my Clark bio in print in early 2018.

2 thoughts on “Thoughts on Banks and the Federal Reserve”

  1. When I was rereading this at home after posting it, I realized that I stated that the U.S. Constitution was written in 1789. Oops. The Constitution was written in 1787 and RATIFIED in 1789, as I stated in my last post about the date of America’s founding. Late night proof reading before early morning posting sometimes misses a few things…

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  2. The Fiat Federal Reserve System is strictly against the biblical prohibition of unjust weights and measures as written in Proverbs 11:1″A false balance is abomination to the Lord: but a just weight is his delight.” Calling something a dollar went it really isn’t is a fraud. It steals wealth from those who do work in the form of removing purchasing power.

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