Ellen Brown is an attorney and author. She is Chairman of the Public Banking Institute. Her latest book is Central Bankers’ Desperate Grab for Power. She writes:
“The titans of finance capital are talking out loud about breaking the power of the dollar -by boosting the power of bankers. Better would be to nationalize the Fed and turn it into a genuine public utility.”
Ellen Brown tells us what we would like every high school senior to know if we are to remain a free people. Sadly, few college graduates are taught that the Federal Reserve (FED) is not part of our government and is outside of any rules or control of our voters. It is in no way “federal” and is as much a private bank as is Wells Fargo. Ellen Brown points this out, and many others have tried to tell us this for at least 100 years. Eustace Mullins, whom this author knew personally, is perhaps the best historian on the FED.
A recent example of the FED’s abuse of our money that can only increase consumer prices is the current Federal Reserve System’s practice of repurchasing its issued notes, bills, and maybe even bonds.
The Banker’s Bailout: The FED opens the inflation floodgate
The FED announces weekly the results of this recent weekly buyback of treasury bills and notes that began in April 2019. Each week the FED sends me an e-mail account of how many billions of Treasury bonds bills and notes it bought in the current week and what it plans to purchase later. The FED calls these “Repurchase Agreement” because it sold the same instruments a month or years ago. Not surprisingly, the Fed does not tell us how much of a premium they pay for the repurchased securities, which amounts to the banker’s gift.
The FED writes it will “repurchase” $35 to $70 billion in US Treasury bills and notes every week. These purchases will sum up to about $1 trillion in the first four months of the program. Yes, a trillion dollars of newly created money, to be pumped into the economy through the holders of the treasury instruments. But this is only the beginning. Note the FED need not have any of this cash to make these purchases, because it is a US chartered bank, created by Congress, and can write checks upon itself!
At risk of repeating this point, the FED will create the $1 trillion for “Repurchase Agreements.” As with most Federal Reserve projects, no one, including Congress, approves it. How much of this $1 trillion will end up in the coffers of big commercial banks is anybody’s guess. But we think most of it will, and we do know it will be inflationary. It goes into the economy to stimulate, but in fact, it pumps up prices, including funding contrived wars.
But this is only the end of the story; the beginning is worse! Not one in a thousand Americans realizes that the FED marketed these same treasury bills and notes sometime in the recent past, usually two years ago or less. At the time of sale, the same Federal Reserve Bank printed the instruments on fine paper and sold the same to the buying banks and institutions. The FED is now repurchasing the same instruments. But what happened to the money the FED received from selling Treasuries in the first place? After FED fees and expenses, it wrote a check to the US Treasury to be pumped into the economy and to increase the national debt, which is now about $23 trillion. How much of this money will be spent on funding the war in Afghanistan, possibly Iran, and other vital oil-producing countries?
Please let that sink in for a moment. First, the FED prints and sells bonds for the benefit of the US treasury, which adds it to its debts. Thus the buyers receive a note or bill from the FED. These dollars are then credited to the Treasury account and circulated through the private economy into projects chosen by the President and the Congress.
Now Imagine that the FED is buying back the same paper they printed out of thin air, paying for it with a check drawn on itself as brand new money! Thus the businessmen and banker owners will then have $1 trillion to spend. The object is no secret; it is to temporarily jack up the economy by creating new money. But what about the cost of necessities resulting from the enormous increase in the money supply? Consumers pay for this money inflation with higher prices. No doubt this is why Ellen Brown tells us the Federal Reserve system is out of control and should be nationalized. It is also the reason the FED tells us over and over again that there is not enough inflation to be economically healthy.
If asked, most Americans would respond in the negative, asking “Why nationalize? The Federal Reserve is part of our government, isn’t it?” Helen Brown says no, and so does We Hold These Truths.
An authoritative article in Money Markets entitled “Fed Restarts Bond Buying as Economy Slows” asks rhetorically: “Is this QE4?” Former Congressman Ron Paul is also referring to the “repo market” when on November 11 he wrote: “The Federal Reserve’s bailout operations have increased its balance sheet by over $200 billion since September. Investment adviser Michael Pento describes the Fed’s recent actions as
Quantitative Easing (QE) on steroids.”
Meanwhile, our President backhandedly supports the FED by criticizing it thus: “Fed ‘Boneheads’ they should Cut Rates to Zero or Less.”
No statement by a President would be as welcome to those who control the FED from behind the scenes. Like most brilliant and influential people, those who run the FED appreciate being thought of as benignly ignorant because it covers for their deliberate acts of currency debasement and war promotion. I surmise they would like to have the public mind chalk up a $23 Trillion debt as incompetence or well-intended stupidity. They do not have to be elected or appointed to keep their positions, and it makes their decisions that much easier! The FED leaders can laugh their way to America’s stolen gold hoard, while the President tells us they are just dumb.
I saw this gold valued at only $35 per ounce in 1964, in the 5th-floor underground level of the NY FED. One can only guess where it is today! And we bow to Elen Brown, who clearly understands this story and is putting heart and soul into changing it. God bless her team! Public banks will not get rid of the FED but will educate Americans to do so or to nationalize it, as a first step toward the elimination of this tool for inflation and conflict finance.
The US President probably has reasons for his vicious and ongoing attack on California Governor Gavin Newsom. Why? Because the latter signed the California Public Banking Act in October 2019. Most citizens of the State of California still have not heard it happened, so little publicity did it receive. I have asked several California friends, all of whom have told me they did not see a word about it in the major media or TV. I saw only one brief and misleading story, and it has since disappeared!
The surprise to the world passage of the California Public Banking act is truly a milestone. North Dakota’s quiet,100-year old miracle is the only predecessor. California’s story, good or bad, should have been shouted out from every TV station and paper in the US, and indeed around the world. So why was it blacked out? I say it is the start of the first real challenge to the Federal Reserve system since Congress was beguiled into creating it in 1913. The muffled and gagged media response to the passage of this California act is the best proof of its merit.
The Federal Reserve and its international bank supporters also demonstrated their ominous power over the press in the blackout of an initiative by Colorado’s Public Banking in 2018, that came close to making the Colorado ballot. I live in Colorado, but I did not hear one word about it in the local or national press! I knew about it only because I attended one of the Chairman’s meetings at his church.
We Hold These Truths will interview Earl Staelin, Chairman of the Colorado’s Rocky Mountain Public Banking Institute and will post it on this site. Staelin, a Colorado attorney, will tell us about the many States engaged in similar efforts. He will explain how public banking works, why it saves taxpayers money in North Dakota, and how to help with Colorado’s efforts.
Charles E Carlson
Here’s an interview with Earl Staelin, Chairman of the Rocky Mountain Public Institute Banking, with Chuck Carlson of WHTT: