If I Were Dictator (Part 23)

Posted on Mon 07/18/2011 by marlin6

By Marlin6

On 02/05/2008, I authored a post “Benevolent Dictators Make Good Government”. Examples are King David – Israel – (1010 BC –970 B.C.) in ancient times and General Douglas McArthur – Japan – (1945 –1947) in modern times. I started musing about what I would do if I were absolute dictator of the United States to fast track our country back to a position of greatness and prosperity. Therefore I am submitting a series of posts to PA Pundits (many controversial) about how I would provide solutions to the major issues facing our nation.

FEDERAL RESERVE

I would issue an order that the Federal Reserve Corporation (Fed) and the Securities and Exchange Commission (SEC), will be abolished immediately. We have taken the creation of money out of the hands of Congress, who are accountable to the people, and given it to an independent Corporation of bankers that is not answerable to anyone, in a misguided attempt to take politics out of the currency supply.

Few Americans realize why the Founding Fathers wrote into Article I of the U.S. Constitution:

Congress shall have the Power to Coin Money and Regulate the Value Thereof.

They did this in prayerful hope it would prevent “love of money” from destroying the Republic they had formed. We shall see how subversion of Article I has brought on the “evil” that God warned about in the Bible. How true Solomon’s words are:

The rich rules over the poor, and the borrower is servant to the lender (Proverbs 22:7).

God warned in the Bible that one of the curses that would come upon His people for disobeying His Laws was:

The stranger that is within you shall get up above you very high; and you shall come down very low. He shall lend to you, and you shall not lend to him; he shall be the head, and you shall be the tail [Deut. 28: 44-45].

Not since 1833 have there been calls to abolish a United States bank. At the time, it was President Andrew Jackson who succeeded in abolishing The Second Bank of the United States. Today Rep. Ron Paul (R – TX) is calling for an end to the Federal Reserve. He calls for an audit, then an end to the Fed. He thinks the Fed permitted exorbitant risk-taking by companies ranging from Bank of America (NYSE: BAC) to Citigroup (NYSE: C) and from Morgan Stanley (NYSE: MS) to AIG (NYSE: AID). He believes abolishing the Fed would spur people to save more and become more prudent with their finances because free market forces, instead of a central bank, would set interest rates, limiting the amount of credit in the economy. He is in favor of returning to the Gold Standard and believes an end to the Fed will put an end to the dollar’s long-trending depreciation. He also calls for more regulation on the government and not the markets.

He believes the Fed caused the current financial crisis. A monetary policy of easy credit and artificially low interest rates was the main source of the financial bubble, and the correction is always trying to fix what the Federal Reserve has done. The only way you can address the business cycle and prevent wild swings in the business cycle is by addressing the Federal Reserve and how they cause nothing but mischief. He said, “I believe in free markets. We don’t have free markets and haven’t had them. So it’s convenient for people to blame the free market for the problems, but that’s a fallacy. In a free market, capital would come from savings. People put their money in a savings account or something of real value, and that determines the interest rates. When people don’t save, and we as a nation have not saved for many decades, there is this illusion that there is still so-called capital, or money made for investments. In reality, that capital came from a computer at the Federal Reserve. Therefore it sent the wrong information to businesses and savers, claiming that there was a lot of savings out there. Based on that, people over invested and built too many houses. It’s the Federal Reserve that sends out the incorrect information”.

There would be less credit, but it would still be steady growth. You would never have periods of economic tumult if you had economic growth of 4% or 5%, so you would never have the temptation to turn it off. There would be enough credit, but there wouldn’t be an excess amount. It would be determined by the marketplace rather than by the artificialness of the Federal Reserve. I don’t know of any risk in abolishing the Fed. The biggest challenge is that people might not understand it. If there are problems, they might blame the problems on getting rid of the Fed, while the problem would really be coming from the fact that it had existed. The first year would be tough. The problems would be due to the fact that the Fed would cause so much harm in the correction phase, which is always necessary. Reaction from the global economy to eliminating the Fed depends what you replace it with. If you allow the market to replace it with commodity money and make sure various countries believe in free trade, tariffs should go down, and free trade should reign. You should be able to have much freer travel, so it would be a real move towards globalization and global trade. If only one country does it, there’s more of a challenge, and only the person who goes onto the Gold Standard would benefit. Abolishing the Fed will thwart the dollar’s long-trending depreciation. .

Governments want to spend more than they have and go to war when they shouldn’t, and the only way they can finance it is through the printing press. The period of time when the world accepted a notion of an international Gold Standard was a time of tremendous economic growth. Paul has introduced HR 1207, the Federal Reserve Transparency Act, in which the Comptroller General audits the Fed and then gives a detailed report to Congress. He said the bill very popular. Every Republican in the House has signed on, and 111 Democrats have signed on. He has over 290 supporters, which in theory means that it could pass under suspension because he already have two-thirds in Congress as co-signers of the bill. It depends on the opposition, but there’s a very good chance it will get passed. The opposition argues that auditing the Fed would open up the central bank to the political process and subject the bank to making monetary policy decisions based on lobbyists, politicians, and special interest groups, rather than the necessary economics. The Fed wants to use the political influence that they already have because it’s been in secret. If you have a political influence of a company like Goldman Sachs (NYSE: GS) that can manipulate the benefits toward them and away from Lehman Brothers, that’s political, too. It’s been known for decades that the chairman of the Federal Reserve Board always accommodates a president and tries to have the right part of a cycle come up for election time. But, the audit bill has nothing to do with managing monetary policy.

In terms of reforming the financial regulatory structure, he says the SEC has been a total failure. Now people have this moral hazard of saying “It’s OK, the SEC has looked at their books.” That encourages people to make mistakes. People should be much more cautious. What we need is more regulation of the government – the Federal Reserve and Treasury — not to interfere in the markets. We should let bankruptcy laws work. The most important way to regulate markets is to never prop up the bad investments. Regulation should be defined as enforcing contracts, no fraud, and making sure the government doesn’t interfere for the benefit of special interests. Let state laws take care of fraud cases. Insurance and ratings would all be market-oriented.

Economists use the term “create” when speaking of the process by which money comes into existence. Now, creation means making something that did not exist before. Lumbermen make boards from trees, workers build houses from lumber, and factories manufacture automobiles from metal, glass and other materials. But in all these they did not “create,” they only changed existing materials into a more usable and, therefore, more valuable form. This is not so with money. Here alone, man actually “creates” something out of nothing. A piece of paper of little value is printed so that it is worth a piece of lumber. With different figures it can buy the automobile or even the house. Its value has been “created” in the true meaning of the word.

Money is very cheap to make, and whomever does the “creating” of money in a nation can make a tremendous profit! That profit is part of our story, but first let us consider another unique characteristic of the thing — money, the love of which is the “root of all evil.” An adequate supply of money is indispensable to civilized society. Money is the blood of civilized society, the means of all commercial trade except simple barter. It is the measure and instrument by which one product is sold and another purchased. Remove money or even reduce the supply below that necessary to carry on current levels of trade, and the results are catastrophic.

Since 1913, all our money has been created and issued by an illegal method that will eventually destroy the United States if it is not changed. Prior to 1913, America was a prosperous, powerful, and growing nation, at peace with its neighbors and the envy of the world. But, in December of 1913, Congress, with many members away for the Christmas holidays, passed what has since been known as the Federal Reserve Act. It simply authorized the Federal Reserve Corporation, with a Board of Directors to run the money system This simple, but terrible, law completely removed from Congress the right to “create” money or to have any control over its “creation,” and gave that function to the Federal Reserve Corporation. This was done with appropriate fanfare and propaganda that this would “remove money from politics” They didn’t say “and therefore from the people’s control”. The people were not told then, and most still do not know today, that the Federal Reserve Corporation is a private corporation controlled by private bankers and therefore is operated for the financial gain of the bankers over the people, rather than for the good of the people.

In 1930 America did not lack industrial capacity, fertile farmland, skilled and willing workers or industrious farm families. It had an extensive and highly efficient transportation system in railroads, road networks, inland and ocean waterways. Communications between regions were the best in the world, utilizing telephone, teletype, radio, and a well-operated government mail system. No war had ravaged the cities or the countryside, no pestilence weakened the population, nor had famine stalked the land. The United States of America in 1930 lacked only one thing: an adequate supply of money. In the early 1930’s, Bankers, the only source of new money and credit, deliberately refused loans to industries, stores and farms. Payments on existing loans were required however, and money rapidly disappeared from circulation. Goods were available to be purchased, jobs waiting to be done, but the lack of money brought the nation to a standstill. By this simple ploy America was intentionally put in a “depression” and the greedy bankers took possession of hundreds of thousands of farms, homes, and business properties. The people were told, “times are hard,” and “money is short.” Not understanding the system, they were cruelly robbed of their earnings, their savings, and their property.

World War II ended the “depression.” The same bankers who in the early 30’s had refused loans for peacetime houses, food and clothing, suddenly had unlimited billions to lend for Army barracks, K-rations and uniforms! A nation that in 1934 couldn’t produce food for sale, suddenly could produce bombs to send free to Germany and Japan! With the sudden increase in money, people were hired, farmers sold their produce, factories went to two shifts, mines re-opened, and “The Great Depression” was over! Some politicians were blamed for it and others took credit for ending it. The truth is the lack of money (caused by the bankers) brought on the depression, and adequate money ended it. The people were never told that simple truth and in this article we will endeavor to show how these same bankers who control our money and credit today have used their control to plunder America and place us in bondage.

When some few Patriotic people or organizations who know the truth begin to expose the Fed or try to stop any of their mad schemes, they are ridiculed and smeared as “conspiracy theorist,” “right-wing extremists,” “super-patriots,” “ultra-rightists,” “bigots,” “racists,” even “fascists” and “anti-Semites.” Some, who are especially vocal in their exposure of this treason against our people, are harassed by government agencies such as the EPA, OSHA, or the IRS, causing them financial loss, embarrassment, or other hardships. By these methods, most Americans have been prevented from learning the truth. Therefore, to prevent violence or armed resistance in their plunder of America, they plan to eventually disarm all citizens. They have to eliminate most guns, except those in the hands of government police and army. Fortunately, groups of patriots in every state (and now a growing number of citizens of other countries) know the truth and are helping to fight the bankers’ plans to dump the Constitution into the UN garbage pail. When the bankers prick the credit/debt bubble they will foreclose on America. Then they will own it all.

(marlindictator)