Usury

Legalised fraud - now guess who is involved in that!

Forwarded Message

The Federal Reserve System is usury on a Titanic scale

The Federal Reserve System is composed of 12 private banks which create money out of nothing and then lend it to the U.S. government at usury. It is the most colossal system of usury and fraud that has ever been invented. It was founded by Rockefeller in 1913.

In the ancient world the usurer quickly became owner of most of the country and had all the silver and gold. Then the peasants became slaves or revolted.

Under the paper system, the final collapse can be postponed by printing more fake money. Inflation is the handmaid of the paper system. It is economic warfare and more deadly than an invading army because it comes from the enemy within.

MONEY is the lifeblood of civilization and USURY is the poison that kills it.

"When money is lent on a contract to receive not only the principal sum again, but also an increase by way of compensation for the use, the increase is called interest by those who think it lawful, and usury by those who do not"

(Blackstone's Commentaries on the Laws of England, p. 1336).

Interest is legalized USURY as long as it is done in MODERATION....Governmental decrees fix the maximum interest rates and anything above that is considered USURY. That is like a governmental decree that makes stealing legal... as long as it is done in MODERATION and then calling it borrowing or acquiring, or some other less offensive term.

RETURNING THE MONEY TO THE PEOPLE¹

by Ellen Brown, Attorney at Law Los Angeles, California

"Is it not obvious that there are serious defects in our banking system and our tax system that deprive most of us of fundamental rights and bestow enormous privileges on others?  How many riots must we endure?  How many prisons must we build?  How many of our rights must we lose?  How many of our young people must be sent away to fight in foreign wars before we decide that enough is enough?" --Robert de Fremery - (1916  2000)

One of the most remarkable admissions by a banker concerning the mysteries of his profession was made by Sir Josiah Stamp, president of the Bank of England and the second richest man in Britain in the 1920¹s.  Speaking at the University of Texas in 1927, he revealed:

"The modern banking system manufactures money out of nothing.  The process is perhaps the most astounding piece of sleight of hand that was every invented. Banking was conceived in inequity and born in sin S. Bankers own the earth. Take it away from them but leave them the power to create money, and with a flick of a pen, they will create enough money to buy it back again S. Take this great power away from them and all great fortunes like mine will disappear, for then this would be a better and happier world to live in S. But if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit."

The sleight of hand by which banks create money dates to the seventeenth century, when paper money was devised by European goldsmiths.  Gold and silver coins, the standard currency in European trade, were hard to transport in bulk and could be stolen if not kept under lock and key.  Many people therefore deposited their gold with the goldsmiths, who had the strongest safes in town. The goldsmiths issued convenient paper receipts that could be traded in place of the bulkier gold they represented.  These paper receipts were also used when people who needed gold came to the goldsmiths for loans.

The mischief began when the goldsmiths noticed that only about 10 to 20 percent of their receipts came back to be redeemed in gold at any one time. The goldsmiths could safely lend¹ the gold in their strongboxes at interest several times over, as long as they kept 10 to 20 percent of the value of their outstanding loans in gold to meet the demand.  They thus created paper money¹ (receipts for loans of gold) worth several times the gold they actually held. They typically issued notes and made loans in amounts that were four to five times their actual supply of gold.  The townspeople wound up owing the goldsmiths four or five sacks of gold for every sack the goldsmiths had on deposit, gold the goldsmiths did not actually have title to and could not legally lend at all.

If the goldsmiths were careful not to overextend this credit¹, they could thus become quite wealthy without producing anything of value themselves. Since more gold was owed than the townspeople as a whole possessed, the wealth of the town and eventually of the country was siphoned into the vaults of these goldsmiths-turned-bankers, as the people fell progressively into their debt. As long as the bankers kept lending, the money supply would expand and the economy would be in a boom cycle.  But when the credit bubble got too large, the bankers would raise interest rates and people who could not afford the new rates would default on their loans or would be unable to take out new ones.  Their property would then revert to the banks, and the cycle would start again.

The Rise of the Central Banking System Fractional reserve lending, in turn, became the basis of the modern central banking system.  It allowed private banks to issue gold and silver notes that were many times in excess of the banks¹ holdings.  Although the scheme smacked of fraud, the new paper bank-notes were condoned and even welcomed by kings short of gold, because they gave the appearance of being backed by that scarce commodity.  An expandable money supply was needed to fund the economic expansion of the Industrial Revolution.  The coinage system had put undue emphasis on metals.  Rapid industrialisation had led to repeated economic crises because the availability of precious metal coins could not keep up with demand.

The charter for the Bank of England was granted to William Paterson, a Scotsman, in 1694.  Called the Mother of Central Banks¹, the Bank of England established the pattern for the modern central banking system.  Paterson acknowledged, The bank hath benefit of interest on all monies which it creates out of nothing¹.  The central bank had the legal right to issue notes (paper money) against the security¹ of bank loans made to the Crown.  The Bank thus had the right to turn government debt into paper money, a debt on which the government owed interest to the Bank

In most modern central banking systems, a private central bank is chartered as the nation¹s primary bank, which lends exclusively to the national government.  It lends the central bank¹s own notes (printed paper money), which the government swaps for bonds¹ (its¹ promises to pay) and circulates as a national currency.  Today in the United States, dollars are printed by the US Bureau of Engraving and Printing at the request of the Federal Reserve (the US private central bank), which buys¹ them for the cost of printing them and calls them Federal Reserve Notes¹.  Today, however, there is no gold on reserve¹ backing the notes.  The dollar reflects a debt for something that doesn¹t exist.

The Bank of England was nationalised in 1946, but the coins and notes it issues constitute only about 3 percent of the money supply.  Like in the United States, the rest of the money supply comes from commercial banks in the form of loans, loans created out of thin air with an accounting entry.

The House the Debt Built The result of this illusive credit-money system is that today we¹re living in a credit bubble¹ of ominous proportions.  In 1959, when the Federal Reserve first began reporting the annual money supply, M3 (the widest reported measure) was a mere $288.8 billion.

Special Note:  M1 is what we usually think of as money  coins, dollar bills and the money in our chequing accounts.  M2 is M1 plus savings accounts, money market funds, and other individual or Osmall¹ time deposits.  M3 is M1 and M2 plus institutional and other larger time deposits (including institutional money market funds) and American dollars circulating abroad.

By February 2004  in only 45 years  M3 had multiplied by over 30 times to $9 trillion.  Where did this new money come from?  No gold was added to the asset base of the country, which went off the gold standard in 1934.  The answer to this riddle is that the money didn¹t come from anywhere.   It exists only as a debt.  If that concept is hard to fathom, it is because it actually makes no sense.  It is a fiction based on a fraud¹.

With the exception of a few coins, all of our money is borrowed; and it is borrowed from banks that never had it to lend!  Today they just create it as a data entry on a computer screen. An aggressive experiment Richard Duncan, writing in the London Financial Times on February 10, 2004, pointed to an even more disturbing development.  The Bank of Japan was reported to be printing yen and using the money to buy US dollars, which were then invested in US government bonds.  The United States was going deeply into debt to a private foreign bank in debt for a loan of money created out of nothing.

Duncan called it Othe most aggressive experiment in monetary policy ever conducted¹.  He wrote:

"Japan is printing yen in order to buy dollars in such extraordinary amounts that global interest rates are being held at much lower levels than would have prevailed otherwise S. Since the beginning of 2003, monetary authorities in Japan have created Y27,000bn with which they have acquired approximately $250bn.

(This sum) would amount to $40 per person if divided among the entire population of the world.  (It is) enough to finance almost half of America¹s $520bn budget deficit this year S. Japan is carrying out the most audacious endeavour as conjure wealth out of nothing since John Law sold shares in the Mississippi Company in 1720."

US is now the world¹s largest debtor By the time the great Asian tsunami hit on December 26, 2004, the US federal debt was up to $7.6 trillion; and half of the privately-held portion was owned by foreigners.  Just during the week of the disaster, the Federal Reserve reported that foreign central banks purchased another $5.6 billion in US government debt.  How much is $5.6 billion?  The United States promised to send $350 million abroad in the form of disaster relief.   That means the United States took back to full $350 million it promised to send abroad in about half a day in the form of loans.  The US is now the world¹s largest debtor, borrowing an estimated 80 percent of the world¹s savings annually.  Moreover, the foreign investors who buy US bonds are essentially giving the money away, because under the existing monetary scheme the debt never will or can be repaid. (2)  Why this is true, and why foreign central banks lend the money anyway, is complicated; but to validate the point, here is a quote from a noted economist, John Kenneth Galbraith wrote in 1975:

"In numerous years following [the Civil War], the Federal Government ran a heavy surplus.  It could not [however] pay off its debt, retire as securities, because to do so meant there would be no bonds to back the national bank notes. To pay off the debt was to destroy the money supply."

That is one reason the debt can¹t be paid off: our money supply is debt and can¹t exist without it.  But there is another obvious reason: the debt is simply too big.  To get some sense of the magnitude of a $7.6 trillion obligation, if you took 7 trillion steps you could walk to the planet Pluto, which is a mere 4 billion miles away.  If the government were to pay $100 every second, in 317 years it would have paid off only one trillion dollars of this debt.  That¹s just for the principal.  If interest were added at the rate of only 1 percent compounded annually, the debt could never be paid off in that way, because the debt would grow faster that it was being repaid. (3).  To pay it off in a lump sum through taxation, on the other hand, would require increasing the tax bill by about $100,000 for every family of four, a non-starter for most families.

The US federal debt hasn¹t been paid off since the presidency of Andrew Jackson nearly two centuries ago.  (4)  In fact in all but five fiscal years since 1961 (1969 and 2998 through 2001), the government has exceeded its projected budget, adding to the national debt.  When President Clinton announced the largest budget surplus in history in 2000, and President Bush predicted a $5.6 trillion budget surplus in 2001, many people got the impression that the federal debt had been paid off; but this was another illusion.  The $5.6 trillion budget surplus¹ not only never materialised (it was just an optimistic estimate projected over a ten-year period, based on an anticipated surplus for the year 2001 that never materialised), but it entirely ignored the principal owing on the federal debt.   By 2000, when President Clinton announced the largest-ever budget surplus, the federal debt had actually topped $5 trillion; and by March 2005, when the largest-ever projected surplus had turned into the largest-ever budget deficit, it had mushroomed to $7.7 trillion.

Financial Weapon of Mass Destruction? For the foreign holders of US debt, this could be the ultimate Oweapon of mass destruction¹: they have the power to pull the plug on the US economy. Foreign central bans, concerned with the dramatic flip from a US budget surplus of $236.4 billion in 2000 to a deficit of $413 billion by the end of 2004, are quietly switching their reserves from dollars to Euros and yen.  Mark Weisbrot, do-director of the Center for Economic and Policy Research in Washington, observed in January 2005:

"The timing of any drastic move by big players is very hard to predict. China and Japan for example, either one of those, can cause a complete crash, a total collapse of the dollar just by selling a small portion of their reserves. In fact, probably they won¹t have to sell their reserves, all they have to do is stop accumulating or slow down their rate of accumulation and it will be dollar crash. (5)"

Different provinces experimented differently with a new paper money. Under the Massachusetts plan, it was issued by the provincial government and spent into the economy.  The system worked well until the Massachusetts government got overzealous and issued too much, when the paper scrip¹ became seriously devalued.  Despite that flaw, the Massachusetts scrip served to fund rapid economic development that would not otherwise have occurred.  But it was the colonial scrip of the Pennsylvania provincial government that was the admiration of all.  The Pennsylvania bank lent money into the community, to be repaid by borrowers at interest to the provincial government.  Because the scrip was returned to its source, the money supply did not become over-inflated and the currency retained its value.  It also returned profits to the government, sometimes funding half the province¹s budget. (6)  This paper money scheme, said Franklin, was the reason Pennsylvania "has so greatly increased in inhabitants" having replaced "the inconvenient method of barter" and given "new life to business [and] promoted greatly the settlement of new lands (by lending small sums to beginners on easy interest)."

The Real Cause of the American Revolution The colonies thrived without silver or gold until 1751, when paper legal tender¹ was outlawed in New England by King George II.  The result was to force the colonists to borrow the British bankers¹ silver and gold (or their paper banknotes that were ostensibly receipts for it).  In 1764, Parliament extended the ban on paper money to all of the colonies, and ordered that only gold and silver could be used to pay taxes.  Only a year later, Franklin wrote in his Autobiography, the streets of the colonies were filled with unemployed beggars, just as they were in England.  The money supply had been suddenly reduced by half, leaving insufficient funds to pay for the goods and services these workers could have provided.  This, Franklin said, was the real reason for the Revolution.  It was "the poverty caused by the bad influence of the English bankers on the Parliament which has caused in the colonies hatred of the English and S. The Revolutionary War."

The colonists won the Revolution against the British Crown, but they lost the right to create their own money to the British bankers and their cronies in America.  The bankers won by stealth, propaganda, and misrepresentation concerning the nature of money and banking.  In 1863, Congress under President Abraham Lincoln broke free and again issued its own paper notes, which were used to finance the North¹s victory in the Civil War.  But after the war was over, the Greenbacks¹ were withdrawn and bankers paper notes were substituted. In 1913, the exclusive right to issue the nation¹s currency was usurped by a private central bank called the Federal Reserve¹, although it is not federal and keeps no gold reserves.  In 1934, President Franklin Roosevelt took the country off the gold standard.  Today, all of our money is ¹fiat¹ money (money by decree¹), issued by private banks as credit either to the government or to individuals and corporations.

The Greenback Solution A $7.7 trillion (+) debt tsunami is currently bearing down on the United States.  Congress needs to liquidate it before it liquidates the United States. But how?  The debt was created by sleight of hand.  It can be eliminated by sleight of hand.  Factional reserve lending can be abolished by legislative fiat.  The Federal Reserve can be made what most people think it now is a truly federal¹ institution  and the power to create money can be returned to the people.

The $7.7 trillion federal debt was created with accounting entries on a computer screen.  It can be eliminated in the same way.  The simplicity of the procedure was demonstrated in January 2004, when the US Treasury called a 30-year bond issue before its due date.  The Treasury¹s action generated some controversy, since government bonds are generally considered good until maturity.  (7)  But calling (or paying off) a bond before its due date is done routinely by other issuers.  Corporations and municipalities buy back their bonds whenever it is advantageous for them to do so.  When interest rates fall, they call their bonds in order to refinance their debt at lower rates.  The difference between a bond called by a corporation and one called by the US Treasury is that the Treasury has the power to make payment solely with a bookkeeping entry, without Oreal¹ money backing it up.   And that appears to be exactly what was done in this case.  The Treasury cancelled its promise to pay interest on these particular bonds simply by announcing its intention to do so

(or by fiat, as they say in French).  Then it paid the principal with an accounting entry.  Here is its January 15, 2004 announcement:

TREASURY CALLS 9-1/8 PERCENT BONDS OF 2004-09 "The Treasury today announced the call for redemption at par on May 15,

2004 of the 9-1/8% Treasury Bonds of 2004-09, originally issued may 15, 1979, due May

15, 2009 (CUSIP No 9112810CG1).  There are $4,606 million of these bonds outstanding, of which $3,109 million are held by private investors. Securities not redeemed on May 15, 2004 will stop earning interest.

These bonds are being called to reduce the cost of debt financing.  The

9-18% interest rate is significantly above the current cost of securing financing for the five years remaining to their maturity.  In current market conditions, Treasury estimates that interest savings from the call and refinancing will be about $544 million.

Payment will be made automatically by the Treasury for bonds in book-entry form, whether held on the books of the Federal Reserve Banks or in Treasury /Direct accounts." (8)

The provision for payment Oin book entry form¹ means that no dollar bills, cheques or other paper currencies are to be exchanged.  Numbers will simply be entered into the Treasury¹s direct online money market fund (OTreasury Direct¹). The investments will remain in place and intact and will merely change character  from interest-bearing to non-interest-bearing, from a debt owed to a debt paid.

Where did the government plan to get the money to Orefinance¹ this $3 billion bond issue at a lower interest rate?  Whether it was from the private banking system on the open market, or from the Bank of Japan with notes printed up for the occasion, or from the Federal Reserve as the purchaser of last resort, the money was no doubt created out of thin air.  As Federal Reserve Board Chairman Marriner Eccles testified before the House Banking and Currency Committee in 1935:

"When the banks buy a billion dollars of Government bonds as they are offered S. they actually create, by a bookkeeping entry, a billion dollars."

Treasury securities If the Treasury can cancel its promise to pay interest on its bonds simply by announcing its intention to do so, and if it can pay off the principal just by entering numbers in an online database, it can pay off the entire federal debt in that way. It just has to announce that it is calling all of its bonds and securities, and that they will be paid in book-entry form¹.  No cash needs to change hands.

A Newer Deal In 1933, President Roosevelt pronounced the country officially bankrupt, exercised his special emergency powers, waved the royal Presidential fiat, and ordered the promise to pay in gold removed from the dollar bill.  The dollar was instantly transformed from a promise to pay in legal tender into legal tender itself.  Seventy years later, Congress could again acknowledge that the country is officially bankrupt and propose a plan of reorganisation.  By simple legislative fiat, it could transform its debts¹ into legal tender¹.

Roosevelts¹s plan of reorganization was called the New Deal¹. [Ed note: reorganization means BANKRUPTCY!]  In this Newer Deal¹, foreign creditors would actually be getting the best deal possible.  They have enormous amounts of money tied up in US government bonds, which the US cannot possibly pay off with tax revenues.  If America¹s creditors were to propel it into bankruptcy, the US government would have to simply walk away from its debts, and the creditors would be out of luck.  If the United States pays off its debts with real legal tender¹, the creditors will have something they can take to the bank and spend in the global market.  If it looks like a dollar, and feels like a dollar, it is a dollar.  The only difference will be that the dollar will have been issued by the federal government rather than Oborrowed¹ from a bank.

One objection that has been raised to paying off the federal debt by monetizing¹ it is that foreign investors would be discouraged from purchasing US bonds in the future.  But once the government reclaims the power to create money from the banking cartel, it will no longer need to sell its bonds to investors.  It will no longer even need to levy income taxes.  It will have other ways to finance its budget.

A Modest Proposal for Eliminating the Personal Federal Income Tax Returning the power to create money to the government and the people it represents would generate three new sources of revenue for the public purse:

1.  The interest earned on loans would be returned to the government

2.  Congress could issue new interest-free US Notes (Greenbacks) to the extent (and only to the extent) needed to grow¹ the money supply in order to cover productivity and interest charges.

3.  If the government were to pay off the federal debt with new Greenbacks, it would no longer need to budget for interest on the debt.

Using 2002 figures, money paid in interest on the federal debt came to £333 billion.  Paying off  the debt would have reduced the collective tax bill by that sum.

REFERENCES

(1)      J Lawrence Broz, et al., Paying for Privilege: The Political Economy of Bank of England Charters, 1694-1844 (January 2002), page 11, MailScanner has detected a possible fraud attempt from "www.econ.burnard.columbia.edu." claiming to be www.econ.burnard.columbia.edu.

(2)      "How much are we giving to Asia?  Nothing, Really" Journal Inquirer (January 13, 2005)

(3)      George Humphrey, Common Sense

(Austin, Texas: George Humphrey, 1998), page 5

(4)      OThe Presidential Facts Page¹, The History Ring, www.scican.net/-dkochan.

(5)      Mead McKay, OCentral Banks Dump Dollar for Euro¹,  Asia Times, www.atimes.com (January 27, 2005)

(6)      Stephen Zarlenga, The Lost Science of Money (Valatie, New York: American Monetary Institute, 2002), pages 367-71.

(7)      OUS Treasury Defaults on 30 Year Bond Holders¹, www.rense.com

(January 20, 2004)

(8)      Department of the Treasury, OPublic Debt News¹, Bureau of the Public Debt, Washington, CD 20239 (January 15, 2004).

(9)      Federal Board of Governors, OTotal Bank Credit Outstanding¹, see W Hummel, OFinancial Data Current and Historical: Money Stock¹, www.wfhummel.cnchost.com/linkshistoricaldata.html

(10)    Federal Reserve Statistical Release, OMoney Stock Measures¹

(January

2, 2003)

(11)    Jan Vandermoortele, Are the MDG¹s Feasible (New York: United Development Program Bureau for Development Policy, July 2002)

Ellen is an attorney in Los Angeles, California and the author of ten books, including the best selling Nature¹s Pharmacy, co-authored with Dr Lynne Walker. This article is drawn from her forthcoming book The Wizards of Wall Street and How They Are Bankrupting America.

Published in Namaste Volume 8 Issue 3

INTERVIEW: Aaron Russo's 'America: Freedom to Fascism' Sep

26 16:32 a.. ENOUGH WITH THE DOUBLESPEAK AND OXYMORONS: < by Fred Cederholm), Tue Sep

26 17:44