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-- The Secret Criminal Society of the Federal Reserve
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Originally posted by Krypton Maybe a little one-sided, but my argument still stands.

Yea I think that remains to be seen.

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What is this socialism in disguise?

What are you talking about? Do you really think fiscal and monetary policies are socialism in disguise?? Really haha?? Please substantiate.

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The market should decide whats best for the market. Where's the capitalism in giving economic controls to a centrally controlled bank?

Market externalities are taught in economics 101. Any economic realist should understand that markets are not the end all be all means towards pareto efficiency.

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Who gets the bubble blowers blowing and bails them out when their bubbles burst?

Nobody is arguing that should be the role of the fed. Are you saying that the Fed shouldn�t do what it can to ward off a liquidity crisis. Or do what it can to avoid a recession leading to a depression?

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Where in the constitution does Congress have the authority to establish a central bank?

Sigh � so we�re going down this path are we? Well if you want to get into the specifics article 1 section 8 of the constitution grants congress with the ability to �coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures�. You figure it out.

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Inflation brought on by increasing the money supply, as recently seen by the FED injecting billions of dollars into the monetary system to help the sub-prime losers who deserve to lose everything, is the very anti-thesis of a free market.

The injection was done to avoid a liquidity crisis. Are you saying the fed should have not intervened? Are you saying the fed should not have intervened during long term capital?? Tell me, how much did the CPI go up during this time?

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A central bank controls price levels, not the market, and the market is the only thing that can accurately determine prices based all on supply and demand. I'm not saying we do without some oversight organization of the economy, but this current economic road we're on is not sustainable.

What fed action are you talking about? Injection of money to avoid a liquidity crisis or the lowering of the fed funds rate? Everything you�re saying is so extremely vague.

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The dollar today is worth only $0.04 it was worth when the Fed took over in 1913. What happened to price stability?

Ummm what happened with wages? What�s been the trend with the purchasing power of the currency per dollar vs. dollar earned? Do you really think that if the Fed didn�t exist the average salary in the US would be $40,000 a year and we could buy a bagel for a fucking nickel while the rest of the world pays what they�re paying now??? Sigh, you�re giving me a headache.

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Wasn't that what they were supposedly created for? The rampant inflation of the 1970's? What was the deal with that? Centrally controlled economies fail in the long run.

Wow. Ok. There�s so little that you understand about what Volker did to control inflation when he took control of the fed that I�m not going to continue this argument unless you start delving into specifics. Here�s a good case study you should read up on to discover why a central bank is critical: the great depression. Wow every economy with a central bank fails in the long run? FFS dude that's virtually the entire world .

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The root of the problem is our government is too damn big. There is a psychologically based theory that says when you have other people's money in your management, you tend to be much more wasteful and risky with it. That is what we have in this country. The government has the mindset of unlimited money. The more it gains weight, the harder it is for it to lose it. That is my thought on why reform is so slow in coming. This country can't run on bonds, loans, injections of fiat cash (inflationary) forever. Progressive taxes and the IRS are the oppressors of the middle class. The myriad of loopholes allow sophisticated high net worth individuals to place their assets in tax deductibles or tax discounted vehicles like stocks, bonds, etc. Why pay 35% tax rate when you can pay at most 15% capitals gains? In fact, if you never sell, what do you pay on returns from dividends, etc? Much less compared to the middle class income earner. This complex confusion just goes to show the curruption of our tax system. Simplification is needed. The bureaucratic IRS with its billion dollar budgets and 100,000 employees needs to be eradicated. The tax solution is either negative income tax, or fair tax. The negative income tax involves a $10,000 yearly payment to all employed persons. A flat income tax would also be implemented. The higher your income, the more taxes you pay, but if you live below the poverty level, you essentially are getting welfare money from the government. Do the math. This system would better replace this currupt progressive income tax we have now. It was be a step in the road towards no income taxes at all as they are against the constitutional freedoms we're supposed to have. Then, the fair tax would be a flat sales tax levied on all sales transactions. That would include everything that can be owned. Stocks, REITs, goods and services. No longer could the high net worth earners be able to hide their assets from fair taxation. Government spending would be reeled in and would depend on the inherent health of the economy. Less sales = less taxes. No more fraud squads breaking down people's doors, tax evaders, IRS, filing 1040's, audits, etc. What a much simpler system don't you think?!

And you just went off on the deep end about fiscal policy that has absolutely nothing to do with the fed. Figure out what the hell you�re arguing and then get back to me.

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I don't care if you don't watch the videos or not. A few are closer to an hour long. But most of them are less than 10 minutes. They would much better articulate my views than I can writing them all out. It's too damn time-consuming and complex to have to describe in writing the details of my arguments, so the videos serve this purpose for me. But if you wanted a piece of my arguments in writing, this post is it. I can go on and on and on, but the post would be more like a book.

Well here�s food for thought, I�ll watch your hour long videos if you spend the 3-6 months + it takes to read and understand several economics textbooks that I can recommend to understand the fundamentals. �It�s too damn time-consuming and complex to have to describe in writing the details of my arguments� when you�re unwilling to even try to transcribe what it is you�re arguing.

For starters try A MONETARY HISTORY OF THE UNITED STATES (1867-1960) by Milton Friedman & Anna J. Schwartz

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Originally posted by occrider Nobody is arguing that should be the role of the fed. Are you saying that the Fed shouldn�t do what it can to ward off a liquidity crisis. Or do what it can to avoid a recession leading to a depression?

If businesses make unwise decisions, why should anyone bail them out? What the fed does to help out unprofitable businesses is to inject more money into the economy and cause inflation. this makes everyone's current savings worth less. why should the population have to suffer for the decisions of bad businessmen?

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Originally posted by occrider Sigh � so we�re going down this path are we? Well if you want to get into the specifics article 1 section 8 of the constitution grants congress with the ability to �coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures�. You figure it out.

Actually, the founding fathers believed in gold currency and against fiat. The reason for this is to prevent the government from printing counterfeit paper money.

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Originally posted by occrider Ummm what happened with wages? What�s been the trend with the purchasing power of the currency per dollar vs. dollar earned? Do you really think that if the Fed didn�t exist the average salary in the US would be $40,000 a year and we could buy a bagel for a fucking nickel while the rest of the world pays what they�re paying now??? Sigh, you�re giving me a headache.

If the money supply stayed the same before the central bank started, the average salary would probably be what it was a century ago. But then, prices everywhere would be a lot lower than they currently are. You can probably buy 100 bagels for that same nickel depending on the supply of bagels.

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Originally posted by occrider Wow. Ok. There�s so little that you understand about what Volker did to control inflation when he took control of the fed that I�m not going to continue this argument unless you start delving into specifics. Here�s a good case study you should read up on to discover why a central bank is critical: the great depression. Wow every economy with a central bank fails in the long run? FFS dude that's virtually the entire world .

I hope you do realize that it was the Federal Reserve itself that initially caused the great depression by inflating the money supply and then contracting it at the end of the 20s.

Here's what Bernanke said back in 2002:
I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.

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Originally posted by occrider Yea I think that remains to be seen. What are you talking about? Do you really think fiscal and monetary policies are socialism in disguise?? Really haha?? Please substantiate.

Did I say fiscal and monetary policies? No I said a centrally controlled economy. Get the words straight. Just because it seems to function fine and dandy today does not mean it will never end.

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Market externalities are taught in economics 101. Any economic realist should understand that markets are not the end all be all means towards pareto efficiency.

Are you saying you want pareto efficiency? In that case, you're right, markets are not the means towards pareto efficiency, socialist policies are. And we know those don't work. Pareto efficiency can't be the basis or goal of any free market economy, so I really don't know what your point is.

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Nobody is arguing that should be the role of the fed. Are you saying that the Fed shouldn�t do what it can to ward off a liquidity crisis. Or do what it can to avoid a recession leading to a depression?

I'm saying the Fed should not be around to flood the market with easy low interest cash, then watch as the market runs wild with it, only to crash and burn, thus requiring the Fed to "step in" to reel in some their central policies caused. Again, the market does not decide the value of its currency, this central corporation does. Anyways, who owns the Fed? It sure isn't our elected government.

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Sigh � so we�re going down this path are we? Well if you want to get into the specifics article 1 section 8 of the constitution grants congress with the ability to �coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures�. You figure it out.

Riiiiight. So why did Congress give up their right to the Federal Reserve?

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The injection was done to avoid a liquidity crisis. Are you saying the fed should have not intervened? Are you saying the fed should not have intervened during long term capital?? Tell me, how much did the CPI go up during this time?

Again, the centrally controlled economy of raising and controlling interest rates creates these liquidity bubbles.

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What fed action are you talking about? Injection of money to avoid a liquidity crisis or the lowering of the fed funds rate? Everything you�re saying is so extremely vague.

I dunno if your trying to not understand what I'm saying or not. I'm not talking about a Fed action. I'm talking about the Fed itself and it how it controls prices, and not the market. I don't know how specific you want this to get...

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Ummm what happened with wages? What�s been the trend with the purchasing power of the currency per dollar vs. dollar earned? Do you really think that if the Fed didn�t exist the average salary in the US would be $40,000 a year and we could buy a bagel for a fucking nickel while the rest of the world pays what they�re paying now??? Sigh, you�re giving me a headache.

Umm, look at the statistics here...Executive Compensation 1936-2003...page 46, table 6...

You'll see that the increases executive compensation since the 1970's has far exceeded the average wage by more than 200-300%, which is more than double to triple the average wage increase. If the average wage were to enjoy the same amount of appreciation, the average wage should be more like 60-80k. Sorry, but for some odd reason executive compensation just has a its own little driver behind the wheel that the average wage just never got.

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Wow. Ok. There�s so little that you understand about what Volker did to control inflation when he took control of the fed that I�m not going to continue this argument unless you start delving into specifics. Here�s a good case study you should read up on to discover why a central bank is critical: the great depression. Wow every economy with a central bank fails in the long run? FFS dude that's virtually the entire world .

And FFS the great depression was caused by the Fed first flooding the market with cheap liquidity which culminated in the 'roaring 20's', then as they realized the mess they were causing, abruptly contracted the liquidity supply. Again, another bubble caused by the fed being burst. Who pays? It's the average worker.

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And you just went off on the deep end about fiscal policy that has absolutely nothing to do with the fed. Figure out what the hell you�re arguing and then get back to me.

There are implications to Fed control of money. High and exotic forms of taxes. Again, the centrally control economic regime of idiot taxes and inflationary money supply hurts what's supposed to a free market economy. That's my tangent.

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Well here�s food for thought, I�ll watch your hour long videos if you spend the 3-6 months + it takes to read and understand several economics textbooks that I can recommend to understand the fundamentals. �It�s too damn time-consuming and complex to have to describe in writing the details of my arguments� when you�re unwilling to even try to transcribe what it is you�re arguing. For starters try A MONETARY HISTORY OF THE UNITED STATES (1867-1960) by Milton Friedman & Anna J. Schwartz

What's with this higher than thou attitude you have going? I'm sufficiently knowledgable about market mechanics to engage in a productive debate.

I really don't know exactly what specifically you want?

I'm very familiar with Milton Friendman's economic views, and I hold him as one of the best economics minds to come around in the 20th century. I agree with the Chicago school of economics with Milton Friendman as my economic view and libertarian economics as the best system of society, government, and economy. The status quo of our current societal structure is in dire need of reform. That's my main argument.

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Originally posted by Krypton Did I say fiscal and monetary policies? No I said a centrally controlled economy. Get the words straight. Just because it seems to function fine and dandy today does not mean it will never end.

Fine you�re ok with monetary and fiscal policy � I said please substantiate. How am I supposed to interpret what you mean when you�re being so abstract as this???

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Are you saying you want pareto efficiency? In that case, you're right, markets are not the means towards pareto efficiency, socialist policies are. And we know those don't work. Pareto efficiency can't be the basis or goal of any free market economy, so I really don't know what your point is.

What are you talking about? Pareto efficiency does not require an equitable distribution of wealth. Seriously wtf are you talking about?

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I'm saying the Fed should not be around to flood the market with easy low interest cash, then watch as the market runs wild with it, only to crash and burn, thus requiring the Fed to "step in" to reel in some their central policies caused. Again, the market does not decide the value of its currency, this central corporation does. Anyways, who owns the Fed? It sure isn't our elected government.

Sigh � congress has oversight over the fed. It�s federally regulated and audited by the GAO. READ THE THREAD I POSTED.
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Again, the centrally controlled economy of raising and controlling interest rates creates these liquidity bubbles.

Yes tell me more about this �liquidity� bubble.. I�m all ears haha.

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I dunno if your trying to not understand what I'm saying or not. I'm not talking about a Fed action. I'm talking about the Fed itself and it how it controls prices, and not the market. I don't know how specific you want this to get...

I�m talking VERY SPECIFIC because I�m in finance for a living and I have no fucking clue what you�re talking about. I�m not a financial retard so be as specific/detailed as you can � trust me, whatever you say probably won�t go over my head unless it�s harder than econometrics

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Umm, look at the statistics here...Executive Compensation 1936-2003...page 46, table 6... You'll see that the increases executive compensation since the 1970's has far exceeded the average wage by more than 200-300%, which is more than double to triple the average wage increase. If the average wage were to enjoy the same amount of appreciation, the average wage should be more like 60-80k. Sorry, but for some odd reason executive compensation just has a its own little driver behind the wheel that the average wage just never got.

Wtf are you talking about? We�re talking about the inflation of prices and you�re bringing up exectuvie wages vs. standard wages. That wasn�t the original argument. You figure out what it was we were talking about and then we�ll talk.

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And FFS the great depression was caused by the Fed first flooding the market with cheap liquidity which culminated in the 'roaring 20's', then as they realized the mess they were causing, abruptly contracted the liquidity supply. Again, another bubble caused by the fed being burst. Who pays? It's the average worker. There are implications to Fed control of money. High and exotic forms of taxes. Again, the centrally control economic regime of idiot taxes and inflationary money supply hurts what's supposed to a free market economy. That's my tangent.

Why did the Fed do what it did? Might want to read up a bit more about it. Friedman�s book is quite excellent in that regard.

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What's with this higher than thou attitude you have going? I'm sufficiently knowledgable about market mechanics to engage in a productive debate. I really don't know exactly what specifically you want?

My �higher than thou attitude� comes from trying to argue with someone who has retarded notions that the Fed is a private institution, makes money off of taxpayers by charging interest, and thinks that we can survive in a world economy without a central bank and with a gold/silver standard despite the realities of economics.

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I'm very familiar with Milton Friendman's economic views, and I hold him as one of the best economics minds to come around in the 20th century. I agree with the Chicago school of economics with Milton Friendman as my economic view and libertarian economics as the best system of society, government, and economy. The status quo of our current societal structure is in dire need of reform. That's my main argument.

The Chicago school of economics/Friedman do not advocate abolishing the fed or reinstating the gold standard.

I think you want some sort of academic response or something? Sorry, but I can't give that to you at this time as I'm still undergrad. Which is the reason I posted a bagillion videos, most of them short, so that they may present the academic or journalistic arguments you want. If there is anything in any of the videos, the short or long ones, that you want to refute, by all means please do it. Because I don't know what more to say to you...

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Greenspan explains how he uses convoluted and disintegrating logic to subvert the general public from gaining an understanding of our private monetary system.

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"a form of syntax destruction," Greenspan refers to a way of answering questions before Congress, without answering the questions. from 60 minutes (aired 9/16/2007)

Ron Paul tells it like it is (again)

OCC, if you don't like videos, here is the anti-fed view in academic writing in the book "HISTORICAL BEGINNINGS . . . . THE FEDERAL RESERVE" which is available in full-text online at the link provided.

[[ LINK REMOVED ]]


THE FIAT EMPIRE

Very good. It will specifically show how inflation hurts us and who is really in charge of our lives.

[[ LINK REMOVED ]]


The Money Masters

This one is a bit old-skool, 1980's, but it's good

Watch it if you want to know how under the current system, we can never get out of debt. A crash of unprecedented proportions is on the horizon unless we change from a system in which the government borrows money from fiat to pay debts. In essence, debt is created to pay off previous debt and the gory cycle continues.

So what exactly is "lawful" money and can I actually redeem my Federal Reserve notes for it?

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TITLE 12 > CHAPTER 3 > SUBCHAPTER XII > � 411 Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank. http://www.law.cornell.edu/uscode/h...11----000-.html

Why aren't the IRS and BATF listed in Chapter 3, Title 31, of the United States Code as agencies of the Department of the Treasury for the United States?

Do you have any knowledge (or at least an idea) about this, occrider?

I want money with intrinsic value!

Maybe they'll start printing US Notes again when Ron Paul gets elected!

/dream

I doubt it. A RP presidency will not get rid of the Fed. He has said this many times. If he did something like that it would drastically affect the economy.

He has said though that he would make gold and silver much more competitive.

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Originally posted by eROs.au I doubt it. A RP presidency will not get rid of the Fed. He has said this many times. If he did something like that it would drastically affect the economy. He has said though that he would make gold and silver much more competitive.

Awwww, come on now. If I wanted to hear a bunch of gibberish I would turn on the television.

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Abolish the Fed by Rep. Ron Paul, MD In the House of Representatives, September 10, 2002 Mr. Speaker, I rise to introduce legislation to restore financial stability to America's economy by abolishing the Federal Reserve. I also ask unanimous consent to insert the attached article by Lew Rockwell, president of the Ludwig Von Mises Institute, which explains the benefits of abolishing the Fed and restoring the gold standard, into the record. Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve's inflationary policies. This represents a real, if hidden, tax imposed on the American people. From the Great Depression, to the stagflation of the seventies, to the burst of the dotcom bubble last year, every economic downturn suffered by the country over the last 80 years can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial "boom" followed by a recession or depression when the Fed-created bubble bursts. With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America's exports or the low rate of savings should be enthusiastic supporters of this legislation. Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of the special interests and their own appetite for big government. Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy. In fact, Congress' constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation's founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy. In conclusion, Mr. Speaker, I urge my colleagues to stand up for working Americans by putting an end to the manipulation of the money supply which erodes Americans' standard of living, enlarges big government, and enriches well-connected elites, by cosponsoring my legislation to abolish the Federal Reserve. http://www.lewrockwell.com/paul/paul53.html

Ron Paul on CNBC in 2004 - UnConstitutional Income Tax



http://www.youtube.com/watch?v=JZl6202HJGQ

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Originally posted by Trancer-X If you have no idea what you're talking about please don't waste our time by speaking If I wanted to hear a bunch of gibberish I would turn on the television.

I'm Sunsnail posting under eros.au's name. I've been following RP's campaign since before he had a campaign (literally!).

Anyway, he states what I said here in this interview at John Hopkin's here:

http://www.sais-jhu.edu/media/sept2...npaul091107.mp3

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Originally posted by eROs.au I'm Sunsnail posting under eros.au's name. I've been following RP's campaign since before he had a campaign (literally!). Anyway, he states what I said here in this interview at John Hopkin's here: http://www.sais-jhu.edu/media/sept2...npaul091107.mp3

I'm only at twenty minutes but this is what he's said,

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If you want free trade and friendship with countries you have to have a sensible monetary unit. But today we have monetary unit that is controlled by the central banks of the world that allows the politicians to spend money endlessly, allows bubbles to build and then burst and then of course the taxpayer's there to pick up the pieces. That is very destructive to international trade. You can't have good sound international trade when you have fluctuating fiat currencies controlled by central banks in a secret backdoor room where one mention by one man in this country will be held (pause) you know, they will (pause) the financial markets will just hold to find out what word or two or three is said because it can change the markets in hundreds of billions of dollars in one day, (changes voice like he's speaking as a Fed Chairman) "Uhhh, tomorrow I'm going to raise interest rates" (changes voice back and acts kind of surprised) Ohhhh, okaayyy. I mean, this is so far from a free market economy, it's so far from what freedom is all about that it astounds me that American's put up with this (...)

The very anti-thesis of capitalism is centralized control of the economy. I find the Federal Reserve to be the very tool of those who really are in power, the owners of the federal reserve. The people of this country need to take back control of their currency; take it away from international bankers; and as Abraham Lincoln said, "The government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the government and the buying power of consumers. By adoption of these principles, the taxpayers will be saved immense sums of interest."

He also said this..."The government should create, issue, and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of government, but it is the government�s greatest creative opportunity. The financing of all public enterprise, and the conduct of the treasury will become matters of practical administration. Money will cease to be master and will then become servant of humanity."

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Originally posted by Krypton I think you want some sort of academic response or something?

Yes I do.

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OCC, if you don't like videos, here is the anti-fed view in academic writing in the book "HISTORICAL BEGINNINGS . . . . THE FEDERAL RESERVE" which is available in full-text online at the link provided.

Thank you for providing something that we can intellectually debate in a more meaningful manner on the internet. Of course, I'm going to have to ask you to highlight one (I'm sure there are multiple) topic at a time. Is there any particular chapter that's fundamental to one of your arguments that you want to start our focus on? I would rather not read an entire treatise just as much as I wouldn't ask you to read an entire economics text book.

/sorry for the late reply, just caught this thread now

hey krypton- in your world is there nothing but conservatives and socialists? what kind of economic outlook/understanding is that?

and yes, i want you to pick a particular aspect and argue with occ about it. good luck! you appear so vehement in your beliefs, you should be able to present a proper argument without resorting to videos ad nauseum.

i would like to see you debate economics with occrider just as much as i enjoy reading trancer-x arguing civil engineering with the colonel

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I find the Federal Reserve to be the very tool of those who really are in power, the owners of the federal reserve

um, who do you think owns the federal reserve btw??

How about Chapter 1, section 6? It talks about the secret meeting of international bankers on Jekyll Island. Specifically, they wanted to create the Federal Reserve so that they could control the issuance of money. The initial goal was to get support from Congress to enact that power for them. And Senator Aldrich was the man to bring all the right people together to get that job done. Unfortunately for them, the constitution gives only Congress the power to issue currency and coin. So why does Congress cede this power, and thus cede checks and balances, to a private bank? Additionally, all this was done in secret! Why the secrecy? My answer is because they knew it was unconstitutional, but did not care. They have never cared. As Napoleon Bonaparte reflected on his relationship with financiers, "The hand that gives is above the hand that takes. Money has no motherland;
financiers are without patriotism and without decency:
their sole object is gain."

I have had the liberty to experience the same greed that all bankers have. That greed is the profit motive. But unlike these powerful men, I have my ethical limits, and I seek not to usurp the constitution with my profit motives.

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Federal Reserve proposal was unconstitutional from its inception, because the Federal Reserve System was to be a bank of issue. Article 1, Sec. 8, Par. 5 of the Constitution expressly charges Congress with "the power to coin money and regulate the value thereof.". Warburg�s plan would deprive Congress of its sovereignty, and the systems of checks and balances of power set up by Thomas Jefferson in the Constitution would now be destroyed. Administrators of the proposed system would control the nation�s money and credit, and would themselves be approved by the executive department of the government. The judicial department (the Supreme Court, etc.) was already virtually controlled by the executive department through presidential appointment to the bench.

Paul Warburg later wrote a massive exposition of his plan, The Federal Reserve System, Its Origin and Growth7 of some 1750 pages, but the name "Jekyll Island" appears nowhere in this text. He does state (Vol. 1, p. 58):

"But then the conference closed, after a week of earnest deliberation, the rough draft of what later became the Aldrich Bill had been agreed upon, and a plan had been outlined which provided for a �National Reserve Association,� meaning a central reserve organization with an elastic note issue based on gold and commercial paper."

On page 60, Warburg writes, "The results of the conference were entirely confidential. Even the fact there had been a meeting was not permitted to become public." He adds in a footnote, "Though eighteen [sic] years have since gone by, I do not feel free to give a description of this most interesting conference concerning which Senator Aldrich pledged all participants to secrecy."

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quote:

Originally posted by Krypton So why does Congress cede this power, and thus cede checks and balances, to a private bank?

the federal reserve is not a "private bank".

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