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JAMES RICKARDS is the author of the book, Currency Wars. Courtesy photo
This year, the Mountain Democrat has covered the subject of the economy in a series of articles.
From stories describing how local people have lost their homes and jobs, to battles over higher taxes and fees, the thread running through all these articles is how people are affected by monetary policies.
Helping to make sense out of what is happening locally, nationally, and internationally, two individuals knowledgeable about the monetary system were interviewed on what is happening and how it affects us both economically and politically in this first of three articles.
One of those interviewed was G. Edward Griffin, who is an American film producer, certified financial planner, and author of several books, including one about the Federal Reserve called The Creature from Jekyll Island. He has a degree from the University of Michigan in speech and communications.
The second is James Rickards, author of the book Currency Wars: The Making of the Next Global Crisis. Rickards is a partner in JAC Capital Advisors, a hedge fund based in New York. Rickards has held senior positions at Citibank, Long-Term Capital Management and Caxton Associates and has appeared on CNBC, Bloomberg, Fox, CNN, BBC and NPR and is an Op-Ed contributor to the Financial Times, New York Times and Washington Post.
Rickards is also a visiting lecturer at Northwestern and the School of Advanced International Studies (SAIS), has delivered papers on risk at Singularity University, the Applied Physics Laboratory and the Los Alamos National Laboratory. He is an advisor on capital markets to the Director of National Intelligence and the Office of the Secretary of Defense. He holds a Master of Laws in Taxation from the NYU School of Law; a Juris Doctor from the University of Pennsylvania Law School; a Master of Arts in Economics from SAIS and a BA from Johns Hopkins.
The magic money machine at the Fed
Both Griffin and Rickards say much of America’s economic woes can be blamed on the Federal Reserve or the Fed. Since its founding in 1913, Rickards says it has destroyed 95 percent of the value of the dollar; Griffin says it’s more like 97 percent.
According to Griffin and others who have research the subject, the Fed is not an agency of the government and it has no reserves. Instead it is a cartel of private banks that has gained the most important monopoly of all — control of the country’s money supply.
Griffin said whenever the government needs money, the Fed simply creates it out of thin air and gives it to the government. That money then goes to government employees, contractors, foreign governments, and others. However, no one knows exactly who the Fed gives it to because it refuses a complete audit in order to protect its “independence.’
Eventually the money is deposited into commercial banks and using what’s called fractional reserve banking, the commercial banks are able to multiply the value of that money nine times in the form of loans at interest. In other words, for every $1,000 deposited with the bank, they can loan out $9,000. This so-called “high-powered money” is also created out of thin air.
The interest charged by the Fed on the use of their imaginary money goes first towards their expenses — which Griffin says are considerable — and then the remainder goes to the Treasury Department. Currently the interest due on this money is so large it will never be paid back. This raises the specter that the Fed, which recently announced it will buy $40 billion a month in mortgage-backed securities, may eventually take possession of a good portion of America’s assets in payment of the interest on the imaginary money they loaned us.
The Fed, the government and inflation
While Congress has the power to issue money interest free, it has chosen to support the Fed because of how the government benefits. According to Griffin, the government is always spending more money than it takes in in taxes. And if they had to cover all their expenditures with tax revenue, they’d be voted out of office or there would be a revolution.
So needing a large source of revenue other than taxation, they went into partnership with the Fed and gave them the authority to create money out of nothing. “That’s not all of it,” said Griffin, “but that’s the reason the government went along with this. They saw it as a means to get revenue without having to tax people and that’s the cause of inflation.”
However, inflation turns out to be the biggest tax of all although it’s a hidden one. On the surface, the price of everything appears to be going up when what’s happening is that the value of the dollar is declining because of money printing tied to government spending.
For example, back in 1955, a McDonald’s hamburger was 15 cents, a milk shake was 20 cents and fries were 10 cents. Today, it’s $1 for a basic hamburger, $1.20 for a milk shake, and 90 cents for fries.
Rickards said that income inequality is actually worse in the United States than in places like Mexico. He said when he was growing up, “we always saw Mexico as the classic top-down oligarchical unequal income distribution society and yet America is even worse. The rich are getting richer and the poor are getting poorer.”
Rickards believes recent actions by the Fed to dramatically increase the money supply are deliberate efforts to create inflation in order to reduce what the U.S. owes to other countries. And though he doesn’t think these actions are intended to destroy the dollar, the debasement may have that effect anyway.
Devaluing debt to China
At present Americans benefit from the fact that the dollar acts as the world’s reserve currency. It has had that role since 1945 when the dollar was set as the peg against which other countries valued their currencies. It is that status which has allowed for the growth of America’s welfare-warfare state.
“But when things get bad enough we may find there’s another global reserve currency at the end of the day,” he said.”(The) short-term agenda is to get inflation into the economy because the U.S. cannot pay off its debts … 4 percent inflation for 17 years cuts the value of the dollar in half. So we can’t pay off our debts, but if we cut the value of the dollar in half, we can. So we’re sort of saying to the Chinese, hey, we owe you $3 trillion dollars, but we’re just going to print more money so here’s your $3 trillion dollars, but good luck buying a loaf of bread.”
Right now the U.S. is exporting its inflation because of the dollar’s status as the world’s reserve currency. According to Rickards, “For the time being, inflation is going abroad and is contributing to inflation in other countries because they are trying to peg their currency to the dollar and the way it works, we print more dollars and they find their way abroad in the form of purchasing their exports or direct foreign investments or hot money capital flows.
“If you’re China or another country and we’re trying to maintain your peg to the dollar, you have to print more of your own currency to soak up the dollars. The faster we print money, the faster other countries have to print to soak up dollars if they want to maintain the peg to the dollar. The result is inflation shows up overseas. (But it) will come home eventually.”
Contact Dawn Hodson at 530-344-5071 or dhodson@mtdemocrat.net. Follow @DHodsonMtDemo on Twitter.
In 1952 Eustace Mullins wrote “The Secrets of the Federal Reserve”. G Edward Griffins’ book, “The Creature from Jekyll Island” – published 42 years later – remarkably resembles his predecessor’s. Interestingly, Chapter One of the 1952 “Secrets” is titled “Jekyll Island”.
Rich folks love to go to Jekyll Island. And, they’ve been going there for a long, long time.
I, not being a rich folk, visited when I was stationed in Savannah.
Evelyn, it appears we are home alone.
Every exponential function eventually “blows up”. . . with the FED it blows up . . . without the FED it blows up.
A = P(1+r/n)^nt
The product of a sum is equal to the sum of the products.
This looks like a good spot to park the following: BANK OF AMERICA CEO BRIAN MOYNIHAN APPARENTLY CAN’T REMEMBER ANYTHING
@ http://www.rollingstone.com/politics/blogs/taibblog/no-evidence-he-was-stoned-but-bank-of-america-ceo-brian-moynihan-apparently-doesn-t-remember-much-of-the-last-four-years-20121127 ********** This Rolling Stone article links to the transcript of a New York court May 2012 videotaped deposition of Mr Moynihan in the matter of MBIA Insurance Corp. vs. Countrywide Home Loans, Inc. Rolling Stone says this “will go down as one of the great Nixonian-stonewalling efforts ever.” Indeed!!! A transcript search reveals Mr. Moynihan saying at least 160 times “I don’t know.” “I don’t recall.” “I don’t have knowledge.” “I don’t have an opinion.”
Evelyn, Mr. Moynihan will never be held to account. He is too big to fail.
James, Moynihan probably is TBTF – unless he speaks “unwisely” or sometime down the road becomes a sacrificial lamb.
Eustace Mullins’ 1952 “Secrets of the Federal Reserve” was the first nationally-circulated revelation of the secret meetings of the international bankers at Jekyll Island, Georgia, 1907-1910, at which place the draft of the Federal Reserve Act of 1913 was written.
Mullins’ research at the Library of Congress was directed and reviewed daily by George Stimpson, founder of the National Press Club in Washington, whom The New York Times on September 28, 1952 called, “A highly regarded reference source in the capitol. Government officials, Congressmen, and reporters went to him for information on any subject.”
He made the following acknowledgment: “I wish to thank my former fellow members of the staff of the Library of Congress whose very kind assistance, cooperation and suggestions made the early versions of this book possible. I also wish to thank the staffs of the Newberry Library, Chicago, the New York City Public Library, the Alderman Library of the University of Virginia, and the McCormick Library of Washington and Lee University, Lexington, Virginia, for their invaluable assistance in the completion of thirty years of further research for this definitive work on the Federal Reserve System. “ ********** G Edward Griffin’s means of researching this highly complex subject is unclear. In the course of a 600 page book he references Mullins work on page 413 alone.
Griffin’s own credibility is not enhanced by citing Eustace Mullins. Griffin wrote and narrated the 1992 documentary The Discovery of Noah’s Ark, based on U.S. Merchant Marine officer David Fasold’s 1988 book, The Ark of Noah.[45] Griffin’s film said that the original Noah’s ark continued to exist in fossil form . . .” Griffins credibility is further eroded through his plagiarism of Mullins work. . . . LINK – Eustace Mullins’ on FED, Ron Paul, Rockefeller & G. Edward Griffin
LINK – Eustace Mullins on Fake Moon Landing and David Icke
LINK – Eustace Mullins Antichrist will rule the World
in his own words – youtube – LINK – Currency Wars – James Rickards
Our government has only one economic policy. Tax and spend. Borrow and spend. Print and spend. When you reach the limit, increase the limit.
In bankrupt Greece the debt per citzen is @ $39,000. In America where they will spend more today than they did yesterday the debt per citzen is @ $55,000 and growing. The single greatest benefactor to all that spending just happen to be the very same people who want more of it. The public sector.
Eustace Mullins’ “Secrets of the Federal Reserve”:
HERE.
LINK – 2001 Eustace Mullins: Curse of Canaan, Freemasonry, True American History – Pro Active News
LINK – Eustace Mullins Money and the Conspiracy of Evil – POINT OF CLARIFICATION – i post eustace mullins links not to praise him. i post eustace mullins links to expose a fruitcake, wako example of the “special knowledge” industry (just-between you-and-me) – shush!!! THEY don’t want you to know!!!
The foundation of VIRTUALLY ALL financial conspiracy literature is the protocols of the elders of zionTHE PROTOCOLS ARE A FORGERY.LINK – The Protocols of the Elders of Zion
OFF OFF
Fully understand that P.V. seeks not to praise. Two comments following on 3 similar items he posted yesterday. (1) Mullins’ scholarly work on the Federal Reserve is my particular interest. (2) The title “Eustace Mullins Antichrist will rule the World” misleads insofar as the word “antichrist” is not in the interview itself. Rather, after discussion of Israel, Mullins focuses primarily on Ezra Pound, his mentor (also mentor to TS Eliot, Ernest Hemingway, William Butler Yeats & James Joyce – all Nobel literature prize recipients), and lastly, the Federal Reserve. ********** Rejection of Mullins’ “Secrets of the Federal Reserve” would be more meritorious coming from someone who actually had read the work.
Claiming Ezra pound as his mentor, ” Mullins focuses primarily on Ezra Pound, his mentor . . . ” tends to make the case that at the core of most/nearly all conspiracists lies the Protocols of the Elders of Zion. Ezra Pound – “While in America, Pound received an honorary doctorate from Hamilton College on 12 June 1939, and a week later he returned to Italy, where he began writing antisemitic material for Italian newspapers, including one entitled ‘The Jews, Disease Incarnate.’ He wrote to James Laughlin that Roosevelt represented Jewry, and signed the letter “Heil Hitler.” . . . He wrote in The Japan Times that “Democracy is now currently defined in Europe as a ‘country run by Jews,’” and told Oswald Mosley’s newspaper the English were a slave race governed by the Rothschilds since Waterloo. . . . You let in the Jew and the Jew rotted your empire, and you yourselves out-jewed the Jew … And the big Jew has rotted EVERY nation he has wormed into.
—from one of Pound’s radio broadcasts, 15 March 1942 Ezra Pound as ones mentor? Fine.
http://en.wikipedia.org/wiki/Ezra_Pound
Ezra Pound, also mentor to TS Eliot, Ernest Hemingway, William Butler Yeats & James Joyce – all Nobel literature prize recipients - which tends to prove that brilliance is no shield against brilliantly presented bigotry wrapped in intellectually shiny wraps neatly tied with impressive curriculum vitae spoken with authority in a crisp English accent. BTW Henry Ford was also a victim. Brilliant advocates of a lie do not convert the lie to truth, but they can produce a genocide . . . again . . . and . . . again. The lie of the Protocols seems immortal.
This is an interesting article and threadl
The exchange regarding Eustace Mullins’ “Secrets of the Federal Reserve” could take all sorts of further detours, some profitable, some amusing or inflammatory. Not having the heart for more, however, I withdraw with these final comments: (1) Fair & open discussion reliably can be squashed using well-worn labels in the mold of “conspiracy theorist”. (2) Ezra Pound’s contribution to Mullins’ work lay in asking him to research the Federal Reserve. (3) READING A WORK PROVIDES THE FOUNDATION FOR HONEST CRITIQUE.
Really? READING A WORK (“Secrets of the Federal Reserve”) PROVIDES THE FOUNDATION FOR HONEST CRITIQUE? I question the worthiness of “honestly debating” a redesign and fresh rollout with fresh paint and extra doodads of ”last year’s” Protocols of the Elders of Zion.