March 2013

I have stayed away from writing anything about world conspiracies, mostly because Im a firm believer in the fact that our society is too complex and too chaotic to allow a true sideways push to take over any ideal it has concerning its survival. My daughter and I chatted the other day about the conspiracy that the Department of Homeland Security in issuing an order for close to 2 billion rounds of ammunition, and 2000 armored vehicles where they preparing to lock down the US population or what? There is one situation that I do find, albeit is out-in-the-open, and in reality cannot be called a true conspiracy is the entity we know as the Federal Reserve. The entity that was created on December 23rd, 1913 in response to a series of financial panics, in particular the panic in 1907, which in itself was an interesting exercise in monetary manipulation. It was also the same year that Federal Income Tax became a permanent reality with the top 1% (over $500,000) at a rate of 7%, and the rest of the nation at 1%, the government collected $28.3 million for 1913. The Panic of 1907 (1907 Bankers Panic / Knickerbocker Crisis) came about when the now infamous New York Stock Exchange lost 50% of its value from a year previous. The sky is falling couldnt have happened at more inopportune time as the nation was in a recession, the panic was caused by numerous runs on banks and trust

companies, eventually washing over the land with a result that many state and local banks along with businesses falling into bankruptcy. The trigger for the stock plunge was the failed attempt by F. Augustus Heinze, owner of the United Copper Company, Butte, Montana and his buddy Charles W Morse of dubious Wall Street fame in cornering the stock of United. Heinzes brother Otto rolled out a scheme to short squeeze the value of the stock, whereas at the end of the day theyd be able to purchase as many remaining shares, in this they believed they could then force the short sellers to pay for their borrowed shares. The aggressive purchasing would drive up the share value, and being unable to find shares elsewhere, the short sellers would have no option but to turn to the Heinzes who by then could name their price. The three master-minds had previous to this scheme based on their wealth found two of them Augustus and Morse having control of many banks, serving on at least six national banks, ten state banks, five trust companies and four insurance firms in other words they were well placed in the financial world. Even before the scheme unfolded Morse had told Otto that he needed much more money than he had to attempt the squeeze, yet he went ahead anyway. On Monday, Oct 14th, he started his aggressive run on United Copper shares, his action driving up the share value from $39 to $52 by the end of the day. On Tuesday he called for Short Sellers to cough up their borrowed stock share price jumped to $60, to his dismay Short Sellers were able to lay their hands on shares other than from the Heinzesour dear Otto had mis-read the market and the share price started its way to the basement. By the end of Tuesday the stock closed at $30, falling to $10 on Wednesday poor Otto was ruinedthe stock of United Copper was traded outside of the sacred halls of the New York Stock Exchange, literally on the curb history shows that this curb market would morph into the American Stock Exchange.

The WSJ reported, Never has there been such wild scenes on the Curb, so say the oldest veterans of the outside market.the crash was well on its way. It was later proven that J.P.Morgan had published rumors that the Knickerbocker Trust Company was insolvent some say tongue in cheek that it was a deliberate act of market manipulation. Needless to say banks who lent money on the cornering scheme suffered monetary runs, later spreading to their affiliated banks and trusts, leading to the eventual downfall of the Knickerbocker Trust Company at the time New York Citys 3rd largest Trust. When word hit the streets that Knickerbocker was in trouble the regional banks withdrew their cash reserves from NYC banks, the panic moved like lighting across the nation as people in mass withdrew their deposits from their banks. Into this growing wildfire stepped J.P. Morgan who pledged large sums of his money, along with arm-twisting (locking them in his library) local bankers to contribute some of their money remember at the time the US had no Central Bank, in other words there was no entity on the books that could inject any liquidity into the market. The financial crisis was averted in general by US Steel (JP Morgans company) purchasing $30 mil of Stock in the Tennessee Coal, Iron and Railroad Company in effect becoming a huge monopoly approved by the anti-monopolist President Theodore Roosevelt he was convinced by Morgans mouthpiece the head of US Steel, Judge Gary. It can be stated that the actions of two-brothers created the Federal Reserve based on their on greed. It was a year later that the father-in-law of John D Rockefeller Jr,, Senator Nelson W Aldrich established and chaired a commission to investigate the crisis under proposal which led to the passage of the Aldrich-Vreeland Act in 1908, their findings issued in a series of 30-reports they drew up the Aldrich Plan the basis for the Federal Reserve System. In establishing the Federal Reserve Act Congress determined three key objectives in monetary policy: a) Maximum Employment, b) Stable Prices, c) Moderate Long-Term Interest Rates. The 1st two are sometimes referred to as the Federal Reserves dual mandate over the years the Feds duties have

expanded, whereas today according to official Federal Reserve documentation that include conducting (regulating) to the Nations monetary policy, supervising banking institutions, maintaining the stability of the financial system, and providing financial services to depository institutions along with the US Government and Foreign official institutions. The Federal Reserve from its inception has been a bone of contention at any one given time by its critics, from its first Chairman of the Board Charles Hamlin to its present Chairman Ben Shalom Bernanke, it has rolled willy-nilly through some attacks from both sides of the political aisle. It has been accused of financial manipulation that has affected the global economy including the primary force behind the creation of a central banking system in Europe the bank of the Euro. Mark Twain answered, before my time, the question What is Man? His response has echoed through time as man acts at all times in his own interest. If youre a student of the past you must realize that this holds especially true for those who control your finances, whereas a banker who welcomes you with open arms will hold no remorse if and when he calls for the financial instrument you might have initiated for whatever it was you walked into his arms for in the first place. You might hold the Nobel Peace prize for mercy you showed to your fellow man, but when your instrument comes due your banker will smile and rip your life asunder if the coin is not forthcoming it is just the way the ball bounces. The Federal Reserve System is noted as being both a public and private institution that is supposed to operate independently within the government, but independent of it. In this the System does not require public funding and obtains its authority and purpose from the Federal Reserve Act (passed by Congress in 1913), and as all acts is subject to Congressional modification or repeal. The four primary components of the act are 1) Board of Governors [7-members], 2) Federal Open Market Committee, 3) Twelve regional Federal Reserve Banks, 4) Member banks throughout the Country.

It is in charge with overseeing the 12-District Reserve Banks and establishing our National Monetary Policy in addition the Board also supervises and regulates the US Banking System, in general. The seven members of the Board are approved by the President (confirmed by the Senate), each for a period of 14-years, they are charged with performing upon the expiration of their term until their successors are appointed and have been qualified, yet within the law they can be removed by the President for cause. The Board is required to make an annual report to the Speaker of the House of Representatives. The Chairman and ViceChairman are appointed by the sitting Governors for a 4-year-term, they can be re-nominated as many times as the President elects, until their 14-year terms expire. All corporations, that is those granted such a title in the United States, must provide their director appointments, financial statement, etc., etc. to maintain their legal title as a corporation, thereby protected by the law of the land, especially if they are publicly traded in the market. The Board of Governors of the Federal Reserve System, the Federal Reserve banks and the individual member banks (keep in mind that the last accounting of banks in the United States showed that 66% of all banks are not part of the Federal Reserve System) must submit to an audit by the Government Accounting Office (GAO) and an outside auditor. GAO audits are limited and do NOT cover most of the Feds monetary policy, actions or decisions, including discount window lending (direct lending to financial institutions), open-market operations, and any other transactions made under the direction of the Federal Open Market Committeein addition the GAO may NOT audit any dealings with Foreign governments and other Central Banks. Various statutory changes have be proposed to include the Federal Reserve Transparency Act that would broaden the scope of the GAO audits. One small regulation was challenged by Bloomberg LP News when it filed a lawsuit on Nov 7th, 2008 against the Governors of the Reserve, which eventually caused the release of the identities of firms which the FED provided guarantees during the later part of the 2000s financial crisis the data was released on March 31st, 2011.

The Federal Reserve is a much bigger player in global monetary policies than one is led to believe, not because one is ignorant but because of its wide ranging playing in International policies through the World Bank and the International Monetary fund, which if youre not aware are two funds under the umbrella of the USA. The FED is the huge animal behind the creation of the Central Bank of Europe, supplying funds to support the new (1992) euro which was established by provisions in the Maastricht Treaty. The treaty established criteria that said any member state must have a budget deficit of less that 3% of their GDP, a debt ratio of less than 60% of GDP, low inflation, and interest rates close to the EU average the UK and Denmark were granted exemptions per their request in other words keeping their monetary symbol or dollar bill. The latest impact of their far reaching monetary arm is the sacking of the Bank of Cyprus, a restructuring gambit to placate the European Union in its quest to reel in the runaway economy of Cyprus. The ECB and the IMF led the charge with Russian system not far behind to bring you up to speed the Cyprus banks paid a high-interest rate on Foreign funds and had an overall low country tax rate it is rumored that the Russians deposited heavily in their banks. Now the structure of the bailout (10 billion Euros) by the EU and the IMF is dictating the consequences which include locking down 40% of the funds over 100,000 euros which by the way is not sitting to well with the local population and the Russians. Translation; if you have 100,000 in the bank, the bank gets to keep 40,000. The move behind this bailout as others in Spain, Greece, and Portugal is that the EU cannot survive if even one drops from the Union. Back on June 28th, 2012 it was Independent Vermont Senator Bernie Sanders who blew the whistle on a $4 trillion FED scam wrapped around a near zero-interest Federal Reserve loans and other financial assistance that went to banks and businesses of at least 18 current and former Federal Reserve regional bank directors in the aftermath of the 2008 financial collapse all documented in the GAO records. Sen Sanders said, This report reveals the inherent conflicts of interest that exist at the Federal Reserve. At a time when small businesses could

NOT get affordable loans to create jobs, the FED was providing trillions in secret loans to some of the largest banks and corporations in America that were well represented on the boards of the Federal Reserve Banks these conflicts must end. The GAO study revealed that allowing members of the banking industry to both elect and serve on the Federal Reserves board of directors created more than an appearance of a conflict of interest, projecting a concrete risk to the Federal Reserve System. In the case of the chairman, president and CEO James Jamie Dimon, JP Morgan received over $391 billion of the $4 trillion in emergency funds from the FED, at the same time JP Morgan was used by the FED as a clearinghouse for emergency lending programs. In March of 2008 the FED provided JP Morgan with $29 billion in financing to acquire Bear Stearns while Jamie was busy getting the FED to take risky mortgages-related assets off of Bear Stearns (balance sheet) before JP Morgan acquired the troubled investment bank now couple this with his work for the FED to apply an 18-month exemption from JP Morgans riskbased leverage and capital requirements. In simple terms, pay no attention to what we are investing in, and remove the requirement that we must have capital to support our investments slick. The report also found that Stephen Friedman, who worked much of his career with Goldman Sacks (chairman from 1992 to 1994), and now sits on its board, and during the 2008 financial collapse was the Chairman of the New York Federal Reserve board. Late in 2008 the New York Fed approved an application from Goldman Sachs to become a bank holding company whereby giving it cheap loans from the Federal Reserve. Keep in mind that as the big-boss of the New York Fed he still sat on the board of Goldman Sachs, and owned copious amounts of Goldman stock ownership that is strictly prohibited by the Federal Reserve interest regulations. In lieu of this, Friedman received a waiver from the FEDs conflict of interest rules in late 2008. Unknown at the time was that

Friedman continued to purchase shares in Goldman from Nov-2008 through Jan-2009 this documented in the GAO report. Then there is GEO of GE Jeffrey Immelt another New York FED board member at the same time at GE helped create a Commercial Paper Funding Facility during the financial crisis the FED later provided $16 billion in financing to GE under this emergency lending program. Despite the fact that on May 22nd, 2008 legislation was introduced to prohibit banking industry and business executives from serving as directors of the 12-Federal Reserve regional banks no one was paying attention to the legislation. During the financial crisis, at least 18 former and current directors from Federal Reserve Banks worked in Banks and Corporations that collectively receive over $4 trillion in low-interest loans from the FED. In addition to the banksters named previously there is Sanford Weill, the former CEO of Citigroup, he served on the FEDs Board of Directors in New York in 2006, during the financial crisis Citigroup received over $2.5 Trillion in total financial assistance from the FED. Richard Fuld Jr the former CEO of Lehman Brothers was on the same Board of Directors (NYC) from 2006 to 2008 Lehman received $183 million before its collapse. James M Wells Chairman and CEO of SunTrust Banks served on the Board of Directors at the Federal Reserve Bank in Atlanta since 2008, SunTrust received $7.5 billion in assistance from the FED. Richard Carrion, big-boss at Popular Inc in Puerto Rico has served on the Board of Directors of the FED in New York since 2008, Popular received $1.2 billion from a FED Term Auction Facility during the crisis. James Smith, Chairman and CEO of the Webster Bank served on the Federal Reserve Board of Directors in Boston from 2008 to 2010 Webster received $550 million from the FED via a Term Auction Facility. Ted Cecala, former Chairman and CEO of Wilmington Trust on the FED Board in Philadelphia from 2008 to 2010 Wilmington received $3.2 billion. Robert Jones, President and CEO of Old National Bancop on the St Louis Board of the Federal Reserve since 2008 Old National received $550 million in low-interest loans.

James Rohr, Chairman and CEO of PNC Financial Service Group, on the FEDs Board of Directors in Cleveland from 2008 to 2010, PNC received $6.5 billion in low-interest loans during the crisis. George Fisk, CEO of LegacyTexas Group, director at the Dallas Fed in 2009, his firm received $5 million low-interest loans from FED Term Auction Facility. Dennis Kuester, former CEO of Marshall & Ilsley, Board Director of Chicago FED 2007 through 2008, his bank received over $21 billion lowinterest loans. George Jones Jr, CEO of Texas Capital Ban, on Dallas FED board since 2009, his bank received $2.3 billion from the FED Term Auction Facility. Douglas Morrison, CFO at CitiBank in Sioux Falls, SD while he served as a Board Director at the Minneapolis FED in 2006, his bank in Sioux Falls received over $21 billion in total financing from the FED. L Phillip Humann, former CEO of SunTrust Banks, Board Director on FED in Atlanta 2006 through 2008, SunTrust received $7.5 billion in total financing assistance from the FED. Henry Meyer III, former CEO of KeyCorp, board of directors FED of Cleveland, 2006 though 2008, KeyBank (owned by KeyCorp) received $40 billion in total financing from the FED. Ronald Logue, former CEO of State Street Corp, on the board of the Boston FED, 2006 through 2007, State Street received a total of $40 billion in financing from the FED. If youre off the mind you can see the entire list of banks, names, and company information at http:/www.sanders.senate.gov/imo/media/doc/0612DimonIsNotAlone.pdf . The next question you should ask yourself is why wasnt the Glass-Steagall Act re-instated, and why wasmt Billy-boy Clinton asked to explain why he repealed it, and finally do we need to overhaul or eliminate the Federal Reserve and along the way give a big hug and thanks to Mr Bernie. As it turns out we all are beginning to understand that bankers, no matter their birth parents, live in a world of big what ifs and by God well make a bundle, with other peoples money just the track they run on.

In accounting the $4 Trillion that slipped out of the doors of the Federal Reserve in 2008, even with todays estimated population in the USA that is $12,676 per every living soul or for a family of four $50,702, think about it! The reasoning behind the bailout was to in effect keep the economy moving instead it went to a few financial institutions and was locked down, and loaned to a few instead of adjusting their home mortgages and relaxing the rules of borrowing they foreclosed on homes, businesses, and other enterprises while throwing massive parties in Las Vegas and in secret highclass hideaways scattered across the globe. America took one massive nosedive into the pit created by the very same organizations that the FED bailed out. Ever since our country bailed from the Gold Standard, which had began it slow roll to absolute back in the 1930s, to when we could no longer stand the financial burden brought on us because of the Vietnam War and the yearly federal deficits which led President Richard Nixon to end the direct convertibility of the dollar to gold on August 15th, 1971 this caused a financial breakdown known as the Nixon Shock. Since that event gold standard advocates in the US have had opposing viewpoints about whether a new Gold Standard might be reborn with existing institutions, such as the Federal Reserve or if it would be better to create new institutions with the Federal Reserve being disbanded or rendered irrelevant. Such a move was considered politically impossible during the 1980s and 90s, the system was cruising along and the Great Bull Market was creating joy and security for its stock and bond holder not a good time to throw in a new free banking system while the FED under Greenspan and Volker was doing just fine. Whereby the monetary situation was pretty steady as if it was operating under its own Gold Standard with the yellow stuff staying around $350/oz Alan Greenspan said to the House Financial Affairs Committee in July 2005, And, indeed, since the late 70s, central bankers generally have believed as though we were on the Gold Standard. Remember the Gold Standard advocates in the 80s and 90s were pretty close to being wingnuts, constantly pounding the table or whatever was in reach of their hairy paws screaming for 100% pure Gold Standard that got

more than a good chuckle from more than a few, as what they were calling for did NOT resemble any actual Gold Standard System in use in the previous two-centuries consequently they got the attention they deserved zero. Today we have find a different situation, where we find the FED overloaded with too many me first greedy money hoarders or currency managers that are driving our financial system over the cliff. In history we see that in this type of situation we find a replacement of the currency, such as happened in Germany the Rentenbank for the Reichsbank, or the US Federal Government issued Continental Dollar, replaced by a free banking system, and in fact, a new Federal Government. As of late the infamous Alan Greenspan who praised the mechanism that was the spark that caused the blow-up of our global economy, the mortgage derivatives, is even suggesting a change when he remarked, We have at this particular stage a fiat money which is essentially money printed by a government and its usually a central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or a currency board, because unless you do that all of history suggest that inflation will take hold with very deleterious effects on economic activity There are numbers of us, myself included, who strongly believe that we did very well in the 1870 to 1914 period with an international gold standard. Now in my opinion when Alan starts talking about Ending the FED things along with the times are changing. Even that crowd who once believed that keeping the FED was politically appropriate would now agree that a more ideal solution is being called for. Finally, any country that has problems with its monopoly currency issuer, should make a change and in some books, mine included the FED always has been a highly suspect institution since its inception in 1913 the shenanigans pulled during the 2008 bailout further proves the case. You dont have to pull the curtain aside to see that the FED has been working a bit too close with certain Too Big to Fail Banks, with 90% of their moves NOT in the publics best interest in addition the FED is heavily influenced by some well known European banking families in effect an

awkward situation when it comes to United States affairs albeit at the endof-the-day we will eventually replace the FED as their laundry is getting a bit too difficult to clean. Back to conspiracy is this situation one, not really it is a select few that have had their hands in the till for too long, and are getting away with it and will continue to rumble through the monetary system taking what they can under a system that is operating under the umbrella of a outdated Act that needs to be outlawed. We cannot continue to believe they will police themselves their greed and me first actions are thrown in the publics face as if they dare us to stop them they will continue to work around the edges of the law until our land is but a shadow of its former greatness and then theyll move on.