MUST READ Lawsuit against Fed: debt must continually be increased to pay usury on earlier debt or scheme will collapse
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MUST READ Lawsuit against Fed: debt must continually be increased to pay usury on earlier debt or scheme will collapse
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-----Original
Message-----
From: Jim
Sent: Saturday, February 04, 2012 6:14 AM
Subject: Lawsuit against Fed: debt must continually be increased to pay usury
on earlier debt or the scheme will collapse
The essay pasted below is an exhibit in a sealed civil whistleblower suit
alleging the Fed has hidden $7 trillion (from deficit spending) that is
profit that should have been paid to the government. The government has 60
days before the Complaint is unsealed (if they want to become a
co-plainant).
If the government seeks an injunction to quash the spread of the
information, you already have it.
Jim
************************************
RIP-OFF BY THE FEDERAL RESERVE
Revised January 2012
References:
Dr. Bob Blain, Emeritus Professor of Sociology at Southern Illinois
University, Edwardsville, in a published paper “Revisiting U.S. Public and
Private Debt” released in 2008 observes the exponential increase in national
debt from 1915 and the destruction inflicted upon historic societies by
usury based monetary systems.
FATAL EMBRACE by Benjamin Ginsberg documents historic occasions in which a
usury debt based economic system (but not so identified) resulted in the
“financiers” facing public fury including deportation, confiscation of
estates, and physical abuse of the individuals involved.
GREENSPAN’S BUBBLES; THE AGE OF IGNORANCE AT THE FEDERAL RESERVE by Bill
Fleckenstein reveals how the Fed suppressed Federal Fund interest rates to
create a false prosperity that devastated the economy for 20 years and
destroyed the home construction industry.
THIS TIME IS DIFFERENT; EIGHT CENTURIES OF FINANCIAL FOLLY by Carmen
Reinhart & Ken Rogoff reviews sovereign defaults as seen by an economist
speaking to the International Monetary Fund/World Bank. It is the nature of
governments to steal from the people.
SUMMARY: This mathematical analysis shows how:
1. The economic scheme in the U.S. of creating fiat book-entry money via
T-securities in the amount of the principal of the security with a promise
to repay the principal PLUS the interest (i.e., deficit spending), is
impossible. The interest is never created. The debt must continually be
increased to pay interest on earlier securities or the scheme will collapse.
2. The National Debt can never be paid off. Contracts that cannot be
culminated are acts of fraud and are void from their inception.
3. The funds from all Treasury security auctions are received on the
accounts of the FRBNY; records of disbursements are not disclosed or
audited.
4. Congress has temporary benefit of deficit spending (a $1.4 trillion ’loan’
for 2010) until maturity of the securities (the collateral). At maturity,
all securities are perpetually rolled over without mention in government
accounting records.
5. The Fed eventually receives the value of all national debt as purloined
profit; every dollar of inflation from deficit spending security auctions is
undeclared profit. Deficit spending was $1.4 trillion for 2010 and $7
trillion for the past six years.
6. Fiscal social obligations of the nation will be restricted during any
economic downturn, whether or not deliberately initiated by the Fed, while
debt will escalate to “stimulate the economy,” for war-mongering, and to
compensate for reduced tax collection.
7. The operation is, as with any Ponzi scheme, predestined for inherent
national bankruptcy when buyers to roll over the increasing debt lose faith
that profit will be generated greater than inflation even while interest
rates sky-rocket. Commerce, the engine of the economy, will cease to
function from uncertainty.
8. Future debt will exceed the entire worth of the nation. As panicked
holders of debt attempt to obtain value, they will sell securities to the
Fed at reduced rates. The Fed will then purchase national heirlooms and
assets at fire-sale prices as in Greece. Ownership of infrastructure and
assets will be controlled by shareholders of the BOG. (or Wall Street
fronts).
9. The touted concept that the public directly funds deficit spending is an
illusion. Such funding can never produce inflation.
10. The 1913 Federal Reserve Act provides that profit from the Fed belongs
to the government. Concealment of funds due the government violates several
federal criminal laws.
*********************************
The Federal Reserve uses euphemistic smoke and mirrors to obscure their
scam. The appearance of the scheme is that Congress receives the benefit of
inflation. In reality, it is the Fed that receives the purchasing power from
inflation---without public awareness or documentation. With full knowledge
the following is not the way the Fed or the government describes the system,
allow me to offer a different analysis of their operation.
CREATING BOOK-ENTRY (FIAT) MONEY
Congress can pay for federal expenses with funds collected from taxes, but
Congress is never satisfied with this amount. The desire to buy
votes/campaign contributions from special interest groups induces
congress-critters to spend more, and this is identified as deficit spending.
To create this make-believe money requires the assistance of the Federal
Reserve.
Congress will give the Fed a T-security (bill, bond, or note) and the Fed
will accept the document as an asset of one of the twelve FR Banks. The Fed
will then establish a line of credit for the U.S. government (a book entry)
in the same amount and list the liability as Federal Reserve Notes. Voila !!
Fiat money has just been created for Congress to spend. Ref: 2009 Annual
Report to Congress by the Board of Governors, page 448 (for account
identification only).
http://www.federalreserve.gov/boarddocs/rptcongress/annual09/pdf/ar09.pdf
The accumulated securities that have been authorized by Congress add up to
the national debt.
If the Fed retained all of the securities (assets), the inflationary
pressure created by the extended line-of-credit for Congress would be too
obvious. Also, Congress complained several years ago the interest collected
was too much profit. The Fed has been forced to return excess profit to the
government. The Fed therefore wants to sell a major portion of the
securities so it has arranged with the Treasury department to act as
auctioneer for selling to the Primary Dealers. This immediately sells the
assets of the Fed.
[FN: The Fed recently obtained $700 billion bailout funds. Secretary Paulson
begged Congress, on actual bended knee, to give the Fed money and Congress
gave them $700 billion in securities. The Fed then swapped the securities to
GSE (Freddie and Fannie)/international bankers for toxic MBS‘s---and rescued
Paulson’s $800 million in Goldman stock by bailing out AIG. ]
[FN: The 2009 Annual Report lists Assets of $776 billion securities and $908
billion Government Sponsored Enterprise Mortgage Backed securities out of
$2.2 trillion total assets. Whether the bailout money, given in large part
to international bankers for toxic assets, was a quid pro quo with the PD to
avoid lawsuits for fraud is beyond the scope of this writing. The
International Bankers do not lightly suffer transgression. The continued
mutual benefit of programs, paid for by taxpayers, should evidence Wall
Street and the Fed/international bankers constitutes a symbiotic relation.]
The value of any securities not sold by the Fed is still in circulation and
becomes the Reserves for commercial banks. Commercial banks, as an
aggregate, have no other source of reserves. All money in circulation is
originated from T-securities. The reserves, derived from Treasury checks
deposited throughout the world, are then multiplied via loans by commercial
banks utilizing the fractional reserve practice. (The System Open Market
Committee (SOMC) selling and buying of securities alters the reserves---with
high leverage---but this effect is applicable only to securities that are
already in the public domain.) The Fed currently holds a mere $750 billion
of $12.5 trillion issued securities. Ref.
http://www.fms.treas.gov/bulletin/b2009_3.pdf. Chart OFS-1 .
Observe that the amount of money created by the security is the amount of
the principal but the amount promised to be repaid is the principal AND the
interest. The interest is never created but payment is required by the
agreement. It is impossible. The linear expansion of base/reserve money via
fractional reserves by creating commercial loans does not change this. If,
hypothetically, all money in circulation was used to pay off the securities
issued by Congress, all bank reserves would be wiped out and the commercial
loans would collapse---and every dollar of interest on the national debt
accumulated from day one would still be due---but there would be no money
outside of the Fed’s vaults to pay it.
The debt created by usury based sovereign debt is perpetual; it can never be
paid off. The contract cannot be culminated. Any contract that cannot be
culminated is an act of fraud. A contract based upon fraud is invalid upon
its inception. It would appear the national debt is not legally enforceable.
(A debt incurred by a state or municipality is not a sovereign debt as used
in this analysis. Such a debt is akin to a commercial loan and is completely
repayable---but may be evidence of unwise administration and result in
default.)
There are esteemed economists who contend the fractional reserve multiplier
is a major cause of inflation. The concept is questionable. Assuming the
amount of base money and the multiplier factor remain constant, the creation
of fractional reserve money reaches a ceiling that cannot be exceeded until
more base money (from T-security issues) is added. The multiplier factor is
a mere linear increase of the base money. A major tool of the Fed is to
alter the base money with SOMC transactions to boost or quench transient
situations. Once the ceiling is reached, only congressional deficit spending
can create new money in circulation.
In medieval times, the gold-guilds would inflate the illusion of a commodity
with paper gold-certificates. Today, the fractional reserve multiplier
increases the image of an image of value; i.e., it increases itself. The
basis of value is from the Treasury security.
SOMC operations and multiplier factor alterations change the amount of FRN's
in circulation---a debt obligation (IOU) of the Fed. Only congressional
deficit spending changes the debt obligation imposed on the citizens.
However, if the multiplier factor is reduced to zero and banks are permitted
to issue currency without limit, it would produce an inflationary bubble of
FR debt just as the housing scam produced a bubble of mortgage debt.
A little-appreciated concept that a FR bank can create money/debt on their
own account in the same manner as a commercial bank making a fractional
reserve loan appears to be rarely utilized. Any requirement that a FR bank
must have reserves is unknown, the lack of which would allow an infinite
expansion of money. This option may be the origin of the $7.7 trillion
recently discovered by Bloomberg that was created to rescue the TBTF banks.
THE INESCAPABLE WHIRLPOOL OF PERPETUAL,
ESCALATING NATIONAL DEBT
There is more skullduggery involved. Let us assume a newly established
sovereign nation is setting up a usury based economy and will issue 100 unit
securities, a five year maturity, and an annual interest rate of 20 percent
over a span of five years. A high rate of interest and short maturity is
used to reduce repetitive calculations. The identifications of Congress and
the Fed will be used to convey the images.
Upon the issuance of the first security, Congress has 100 units to spend. At
the end of the year, Congress/Treasury has to pay 20 units to the Fed for
interest. If the nation had to pay off the security at the end of the first
year, the bankruptcy is obvious. There have never been 120 units created.
Twenty units could be removed from society but that would leave only 80
units in circulation, cause great financial hardships, and still leave an
impossible obligation to redeem a 100 unit security. The solution is to put
off the interest payment until the next issue of security for the second
year. The interest is paid from the principal created by the second issue.
During the second year there are 200 units in circulation but the actual
rate of interest on the second issue is not 20 percent. Since 20 units had
to be paid to the security holders, congress only received 180 units to
spend (100 + 80) but they are committed to pay 40 units of interest on the
security at the end of the second year. The interest rate of 40 divided by
180 is 22.2 percent. Considering the second year alone, the interest is 20
divided by 80 or 25 percent.
When the security for the third year is issued, the interest of 40 units for
the first two years securities will not be available for congress. Congress
will receive only 60 units for public projects but will have to pay 20 units
interest at the end of the year. The 240 units received by congress (100 +
80 + 60) will require 60 units of interest at the end of the third year. The
cumulative interest rate (60 divided by 240) is 25 percent. The interest
rate for the third year alone (20 divided by 60) is 33.3 percent.
At the start of the fourth year, the security will have to cover the
interest charge for the three prior years of 60 units. Congress will receive
40 units for government spending. The 280 units received by congress (100 +
80 + 60 + 40) will demand 80 units of interest at the end of the fourth
year. The cumulative interest rate (80 divided by 280) is 28.5 percent. The
interest rate for the fourth year alone (20 divided by 40) is 50 percent.
The security issued for the fifth year will pay the 80-unit interest for the
prior four years. Congress will have 20 units to splurge. The 300 units
received by congress (100 + 80 + 60 + 40 + 20) will require 100 units of
interest at the end of the fifth year. The cumulative interest rate (100
divided by 300) is 33.3 percent. The interest rate for the fifth year alone
(20 units received--20 units in interest) is 100 percent.
At the end of the fifth year, 100 units must be found to redeem the maturing
security issued the first year (that “loaned” 100 units to the government)
in addition to 100 units of interest that must be paid. Congress has an
obligation to pay 200 units. This factor alone makes it obvious that more
debt must be incurred to continue the scheme. The inescapable whirlpool of
usury debt can only avoid obvious default by increasing the value of future
securities. Increasing the value of issued securities merely postpones the
inevitable result.
As the sixth year approaches, the Fed holds 500 units of securities that
must be redeemed by the Treasury before year eleven. The Fed has already
received 200 units as interest while Congress retains 300 units from those
securities. Before year eleven, the securities will accumulate an additional
300 units of interest payable to the Fed. That accounts for the entire 1000
units of securities and interest that have been involved over the five
years. (Each of the five 100 unit securities involved 100 units of
interest.)
Do not let the subtly of the numbers escape you. As the example
demonstrates, the Fed receives the total value of the security and the
interest if it does not sell the security. Only 500 units were created by
the securities but 1000 units (interest and principal) were somehow acquired
by the Fed. The only way for Congress to get the funding is to issue a 200
unit security at the end of the fifth and subsequent years and ALL of the
value will be instantly due the Fed. The scheme is not only perpetual but it
must increase in size to continue.
When the 200 unit security matures, the value will belong to the Fed. And
then a larger security must be issued to pay for the 200 unit security and
the accruing interest further down the road. This is the methodology of any
Ponzi scheme. The increase in the required size of deficit spending to cover
the interest must be large enough to make the interest payment a relatively
acceptable percentage to minimize public hostility.
[FN: The 100 unit roll-over value for the example’s year five reached $7.0
trillion in year 2010. An additional $1.4 trillion deficit spending accounts
for the $8.4 trillion received from the Treasury auctions. Ref. Post.]
A high rate of interest has been selected for the example to minimize
repetitive calculations. A ten percent interest rate will return 100 percent
of the security value in ten years; a five percent interest rate will take
twenty years. Lower rates of interest merely require more years to reach the
same inherent bankruptcy and tend to beguile the patsies. (Actually,
bankruptcy occurs the first year irrespective of the interest rate, but then
again, since the debt can never be paid off, the entire scheme is based upon
fraud. A contract based upon fraud is void from its inception.)
But 5 year securities are a slow game. If we shifted our attention to 13
week bills, or even four-week bills, each obligation will quickly mature and
must repeatedly be rolled over. Each new issue can cause the creation of
fiat money (inflation) and is profit for the Fed to say nothing of lucrative
transaction fees and commissions for Wall Street cronies. If time lapse
between bid and issue dates are ignored, the roll-over of four week 100 unit
securities can be repeated thirteen times within a year. The gain of 1300
units of profit for the Fed only involves 100 units of national debt.
An economic scheme that utilizes later investors to pay the interest due
earlier investors is identified as a Ponzi scheme. This is precisely the
scheme that has been presented above.
A government publication has noted the fiscal policy insecurity: “(T)his
growing gap between (Government’s) receipts and total spending …cannot be
sustained indefinitely.”
http://www.fms.treas.gov/frsummary/frsummary2010.pdf page 3 of 12. The
statement was undoubtedly intended to support confiscation of more wealth
from the citizens.
ALL FIAT MONEY BECOMES A PROFIT FOR THE FED HIDDEN BY THE FRBNY; THE
OPERATION TRANSFERS ALL THE WEALTH OF THE NATION TO “FINANCIERS”
If the Fed holds the security until maturity, as in the example, the
government must redeem it at maturity. The government has no money (it spent
the fiat money created upon issuance of the security) so it gives the Fed
another security (it rolls it over). The Fed can then sell the new security
and has the redeemed value as profit. In actual practice, the Fed can sell
the initial security and the two steps have merged into one. The waiting
period to receive the profit has been eliminated.
If a security is sold at auction, as approximately ninety percent of them
are, the Fed receives the value of the security from the Primary Dealer and
the ultimate purchaser is eventually reimbursed by the Treasury at maturity.
The U.S. Treasury is authorized by 31 USC #3111 to issue an “obligation” to
buy or redeem maturing debt. Whether auctioned or not, the Fed receives the
value of the security. The value of all T-securities held by the Fed until
redemption is a clear profit for the Fed, as is the value of all securities
sold to and held by Primary Dealers, funds, nations, states, or financial
institutes that create inflation.
Low interest rates will reduce gain for security investors but will provide
cheap money for commercial banks to loan. Much of the interest from
T-securities held by the Fed must be returned to the government as a result
of 1970’s legislation, so the Fed has little motivation to raise rates to
make more money--they receive the value of the security.
The total value of auctions in 2010 was $8.4 trillion. Approximately $6
trillion of the securities sold matured in less than one year.
http://www.treasurydirect.gov/instit/annceresult/press/preanre/2010/2010.htm
; http://www.treasurydirect.gov/RI/OFAuctions?form=histQuery .
The handling of auction funds is the responsibility of the FRBNY. Ref. GAO
FINANCIAL REPORT TO SECRETARY OF TREASURY, Nov 2010, page 17 of net; p14 of
hardcopy.
http://www.treasurydirect.gov/govt/reports/pd/feddebt/feddebt_ann2010.pdf.
Confirmation of the practice is in ACCOUNTING FOR TREASURY SECURITIES AT THE
FEDERAL RESERVE BANK OF NEW YORK , GAO /AFMD-84-10, May 2, 1984, page 9 of
30, http://archive.gao.gov/d5t1/124060.pdf. Additional confirmation is found
in the Fed’s ANNUAL REPORT: BUDGET REVIEW 2010, “The Reserve Banks auction,
issue, maintain and redeem securities…(and handle) paper U.S. savings bonds
and book-entry marketable Treasury securities.” p 5. This writer concludes
the sales are credited to an account of the Fed and not to an account of the
Treasury. There is no inflation if it is otherwise.
The $8.4 trillion in income does not reveal itself in the ANNUAL REPORT TO
CONGRESS; Ref. Tables 10 and 11, pages 454 to 462 REPORT for 2009. Id.
(Auctions are not Open Market transactions. Securities that are not sold are
assigned to SOMC.) This $8.4 trillion is concealed from Congress and the
public.
“Aha!” exclaims a disciple of the Fed. “The above analyze proves the
integrity of the Fed. The $8.4 trillion is obviously being used to pay the
redeemed securities and the sale and redemptions are off-setting.” And thus
would the Fed beguile the naïve. Indeed, the Treasury’s receiving the value
from auctions for that purpose is widely proclaimed in media publications.
Treasury financial statements claim “borrowing from the public” finances
government operations. However, direct transfer of money from the public
cannot, in any way, expand the monetary system or result in the creation of
fiat money (i.e., inflation) any more than can the payment of taxes by a
private entity. The label is deliberately misleading.
The $8.4 trillion is concluded to pay the $7 trillion redeemed securities
with $1.4 trillion being available from the securities for deficit spending
by Congress. The T-securities possessed as an asset by the Fed are sold at
auction and the $1.4 trillion is retained by the Fed while Congress spends
the book entry credits. Where the $1.4 value from the auctions is entered
into the books of the Fed, and to where the $1.4 trillion goes, is not
available information. This is how the fiat money of inflation is created as
detailed earlier.
The $7 trillion for the rollover of redeemed securities does not produce
inflation or add to the national debt. The auctioning of deficit funding
securities increases the amount of credit in existence and adds to
inflation. It also increases the national debt. By merging the two different
groups of auction funds, receipts and payments for redeemed securities (by
PDs) can be concealed with receipts of debt securities and payments to
owners (PDs). The national debt has increased $7 trillion during the past 6
years and is considered hidden profit by the Fed.
It is assumed the IRS knows nothing of this income or profit. Whether Title
12 section 531 or some other provision excludes such income for the
corporate Fed from taxation is for Congress to determine. However, taxation
of the Fed is completely different from taxation of (unknown) shareholders
of the BOG..
The deficit spending of $1.4 trillion required Congressional approval. The
$7 trillion roll-over required no Congressional action but occurred pursuant
to 31 USC #3111. With the national debt at approximately $15 trillion, the
average maturity of Treasury securities is about one year. The interest on
the national debt is shown as an expense on the government’s balance sheet
but the $8.4 trillion from the sale of securities is not included in
government accounting and can conceal a sizeable profit for the Fed.
Assurance has been received the Fed makes no profit from the dealings, but
documentation is totally absent.
Every dollar of inflation is profit for the Fed yet it does not show up on
any income statement or balance sheet of the Fed. Profit of the Fed has been
identified by the courts and legislation as belonging to the government.
Title 12 section 247 imposes upon the BOG a responsibility to make a “full
report“ to congress. The law also provides “Whoever embezzles, steals,
purloins…money or thing of value of the U.S…” is guilty of a crime. Ref. 18
USC 641. Anyone who knowingly “covers up by any trick, scheme, or device a
material fact” of a fraud against the United States can be imprisoned for
not more than five years. Ref. 18 USC 1001. In addition, if two or more
individuals “conspire…to defraud the U.S. (and) effect the object of the
conspiracy” they are each punishable by incarceration. Ref. 18 USC 371.
Anyone knowing of such an offense who “relieves, comforts or assists the
offender…to prevent his apprehension, trial or punishment, is an accessory
after the fact.” Ref. 18 USC section 3, see also 656, 657, 1005, 1341, 1344.
Each of the approximate 500 auctions annually could be a separate indictment
count.
Does “accessory” include any congress-critter who, after being informed of
this scheme, does not expose and prosecute the perfidy of the Fed?
INITIATING THE SCAM---AND THE RESULT
Similar historic banking operations declared they loaned value to the king
and therefore they should receive interest from the loan. The pretense is a
sham. Congress and the Fed have agreed they are going to rip-off the public
by devaluating the currency. Each party acquires purchasing power from the
scheme. Congress gives a promise to pay (a security or collateral) which is
given to the Fed and the Fed gives a promise to honor the government’s
checks with fiat book-entry money (printing press money, i.e., FRN‘s, a
legal tender--a debt of the Fed). A “legal tender” is a commodity that is
required by law to be accepted for a contract stipulating another commodity
(i.e., the original contract is for dollars; you must accept FRN denominated
in dollars). It is an acknowledgement of debt that can never be paid because
there is no lawful money available. Title 12 section 411 clearly stipulates
“(Federal Reserve notes) shall be redeemed in lawful money on demand at the
Treasury Department of the United States… or at any Federal Reserve bank.”
Good luck with that. You will only receive more debt of an under-capitalized
federal corporation created by Wall Street bankers during a week-long
retreat on Jekyll Island and blessed by a rump session of Congress.
To get the scheme started and the con game financed by third parties, it
must have the appearance that interest is their source of profit and a gain
must be made from the brokerage difference. A prime concern for the Fed
under these conditions would be the difference in the value credited to the
Treasury account and the value received from the auction. If the value of
securities purchased by the public is transmitted directly to the Treasury,
there cannot be any inflation, but then there is no gain to the Fed from
book-entry money. The percentage taken by the Fed from the auctions for
profit can even be variable but is hidden without an audit.
If the Fed projected a guise of a brokerage firm selling government bonds to
the public, it would be a simple arrangement with minimal investment or
risk. The currency in circulation in 1913 was non-interest bearing U.S.
Notes. After the operation was set up and the New York Federal Bank was
handling the accounting, it would be a simple shift of accounting procedures
to have the securities accepted by the bank as owner instead of as a broker.
The difference allows the bank to create fiat money (inflation or Federal
Reserve Notes) as a profit for the bank. Whether this falls within the
parameters of embezzlement or other crimes depends upon many conditions.
The courts have repeatedly concluded the profits of the Fed belong to the
United States. Ref. Scott v FRB of Kansas City, 405 F3d 532, 535; In Re Hoag
Ranches, 846 F2d 1227. The fact that the income is not reported is
suggestive of subterfuge.
But the courts are merely upholding legislated provisions. The disposition
of the Fed’s profit was established by the Federal Reserve legislation of
1913: “[A]ll the net earnings (of Federal reserve banks] shall be paid to
the United States as a franchise tax…(and) be applied to the reduction of
the outstanding bonded indebtedness of the United States…” Section 7,
paragraphs 1,2. Any reduction of the “bonded indebtedness” (nation debt) is
unknown; any net profit received from the Fed may has been pooled with
general revenue. The residual of a Fed bank’s assets after dissolution or
liquidation “shall be paid to and become the property of the United States.”
id. Ref. 12 USC section 289, 290.
The Fed claims exemption from unrestricted audit by the GAO. However, the
Accounting and Auditing Act of 1950 clearly established authority for the
GAO to verify “all essential facts regarding the bonded and other
indebtedness of the Government…” There is no exception for, or even mention
of, the Federal Reserve. The Federal Banking Agency Audit Act of 1978
amended the above Act and exempted the Fed from audits of FOMC transactions,
of certain foreign transactions, and of policy matters. The above Acts are
now codified as Title 31 section 714. The Fed additionally claims that since
it does not receive funds from the government or handle government money it
is not subject to audit by the GAO. (The non-receiving of government funds
is but one facet inconsistent with the parameters of a government agency.)
None of the above claims appear to exempt the auction accounts from audit by
the GAO.
First off, the Fed DOES handle government funds. The auction transactions,
and the IRS collection accounts, are both government funds. The accounts are
clearly subject to review by the GAO to assure efficient and correct
handling of government finances and to prevent theft or unacceptable
accounting. Secondly, the exclusions of section 714 do not prohibit review
of the auction accounts. It appears Congress can instruct the GAO to make
such an audit at any time, even without the necessity of additional
legislation.
The Fed's claim of exemption from GAO audit is inane. The Fed is mandated by
12 USC 247 to "make a full report to Congress." And the Fed believes the
government is prevented from verifying compliance with that requirement? In
addition, the Federal Reserve Act of 1913 clearly identified all profit of
the Fed belongs to the government. And the government is supposed to be
prevented from accounting for the profit from the auctions that is
confiscated by the (unknown) owners of the Board of Governors? Such a claim
defies logic.
It is a source of amazement that Bloomberg news took Freedom of Information
Act requests to the Court of Appeals to discover the Fed had loaned $7.7
trillion to the TBTF and international banks (Are these the owners of the
Fed? Where did the funds come from?) after the Fed had successfully hidden
the information from the government. Perhaps a FOIA request should be made
for records of the Treasury auctions. The government deemed specific
legislation was necessary to obtain similar information. Ref. Report
GAO-11-696.
To put $8.4 trillion in perspective, the 2010 operation of the U.S.
government involved $3.4 trillion and that includes the $1.3 trillion
deficit. The entire amount of taxes collected by the U.S. government was
only $2.1 trillion.
If asked “Who owns the T-securities that are sold at the auctions--the Fed
or the U.S. government?” a Fed representative will respond “The securities
are a liability of the government.” An astute observer will note the inquiry
was avoided; it was not answered.
A newspaper article a couple of years ago informed us the annual increase in
interest to be 15 percent while the budget only grew 7 percent. That
reflects the exponential growth of interest. More recently the deficit has
been increasing much faster to rescue financial institutes from default.
Professor Bob Blain, Southern Illinois University, Edwardsville has graphed
the exponential growth in debt from 1915 to be irregular only during the
1930’s.
In 1790 during congressional consideration of Alexander Hamilton’s proposal
to pay the national debt with usury based obligation placed upon the
citizens, congressman James Jackson, after lengthy reflection on the
devastation similar plans had imposed on European countries and cities,
included the following observation to Congress:
“Let us take warning by the errors of Europe, and guard against the
introduction of a system followed by calamities so universal…The funding of
the debt will occasion enormous taxes for the payment of the interest…(such
a system) must hereafter settle upon our posterity a burthen (sic) which
they can neither bear nor relieve themselves from.” Ref. ANNALS OF CONGRESS,
Vol. 1, 1790, pp. 1141-2.
In actual practice within the United States, a collection of taxes for part
of the government spending is well known. Payment of part of the government
expenses by taxation does not alter the government’s usury program; for
analytical analysis they can stand alone. The ninety year pattern of
increasingly larger deficit spending is the escalation as the climax of
chaos beyond description approaches.
The end result of economic exploitation by usury is becoming transparent in
Europe. As various nations become indebted to “financiers,” the demand to
satisfy the debt includes the selling of national heirlooms and
infrastructure to the creditors. Airports, roads, government buildings, and
all resources are fair game. It will not be the Chinese or Japanese that
acquire property. Market securities will be purchased at reduced prices by
the Fed, and then the Fed will acquire assets at fire-sale prices. It will
be the unknown shareholders of the BOG that acquire title. Ownership of land
and resources by a financial oligarchy is but one example of feudalism—the
government becomes a mere facade.
The outstanding funded debt that is even now overhanging the citizens of the
United States, currently $48,000 per individual, is more than enough to
impose slavery if the people submit. The unfunded debt is in the
neighborhood of $160,000 per individual. If the people can be conditioned to
believe they must pay the debt, the income tax (if it exists) can be used to
confiscate 100 percent of their income and the masses must subsist on
government largess. The courts continue to uphold income tax indictments
that rely upon statutes applicable to all taxes as identifying a “known
legal duty” for income taxes (i.e., 7201 -7215) so the make-be-leave statute
that imposes an income tax will not be submitted to contestation with the
burden of proof upon the government. The pursuit of a livelihood, long
secured as a Constitutional Right by the clause of Liberty, cannot be a
proper object for a revenue tax. The Republic of sovereign citizens has been
degraded to a totalitarian nation of obsequious vassals. The hallmark of
every Great Society has been the confidence that each individual has been
able to retain and enjoy the fruits of his labor, and that is being
destroyed in the United States.
Benjamin Ginsberg documents in FATAL EMBRACE numerous times when societies
have revolted against oppression involving “financiers.” One interesting
revelation by Ben involved Barons revolting after financiers induced King
John to invade Normandy. The Barons would have had to pay for the campaign
and it lead to the Magna Carta. Ben laments the financiers subsequently had
their estates confiscated and were exiled. War-mongering has been a
consistent money-maker for financiers. What the people of the U.S. will
tolerate remains to be seen.
For decades, the economic exploitation of other nations, including
orchestrated coups of elected non-compliant governments as formulated by
Kermit Roosevelt, without any regard for laws whether domestic or
international, has been the modus operand of the CIA, IMF, and World Bank.
Ref. CONFESSIONS OF AN ECONOMIC HIT MAN by John Perkins; KILLING HOPE by
William Blum; Google CIA; ROGUE AGENCY RUN AMUCK. It should be apparent the
economic objective has been for the greed of financiers on Wall Street even
when financed by, implemented with, and overseen by government bureaucracy
including the U.S. military. The U.S. government gains nothing from Empire
building. The U.S. and European financiers have consorted to plunder the
world. Ref. TRAGEDY AND HOPE by Carroll Quigley. Now, as humongous deficits
are demanded to give fiat funds to the Fed and rescue financial institutes
from their fraudulent scams even after TARP, Maiden Lane, QE1 and QE2 have
depleted its coffers and international bankruptcy still looms, and after
military facilities/actions throughout the world to protect their
international economic exploitation have bankrupt the Nation, the chickens
are coming home to roost.
[FN: Much has been made over the Federal Reserve banks being privately owned
as distinguished from a government agency. The confusion is fueled by names
and definitions.
The twelve FR Banks (incorporated, and franchisees ?) have been identified
by courts as privately owned by the commercial banks (shareholders) each
with a nine member board of directors---for the issues before the courts.
FDIC is another FR corporation statutorily identified as a government
agency. The FR Board of Governors is separately incorporated with
shareholders alleged to be foreign and NY bankers. The BOG has complete
administrative and supervisory control of the FR Banks---they can remove a
director without cause or they can rescind a policy. The BOG has assumed the
guise of a government agency but does not comport with the parameters of an
agency as established by the courts nor with the legislated definition of an
agency.
The FR system juggle adjudication and FOIA actions to obtain the best
position of a private versus agency status. This conclusion is confirmed,
but may not be continued, after Fox News Network v BOG of FR, 601 F3d 158
(2010, 2nd Cir).