Aug 012012
 August 1, 2012  Posted by at 3:48 am Finance

A Federal Reseve Note worth $20

A few days ago in a re-post here, I explained how the Federal Reserve Act, which established the Federal Reserve System, is an unconstitutional delegation of Congress’ legislative authority to private corporations. It is also unconstitutional because the Fed does not remain accountable to our Congressional representatives in any of the prescribed ways, such as appropriation of funding, appointment/removal of administrators, meaningful oversight through hearings and audits or impeachment of the Fed Chairman. Yet, these core constitutional issues are just the beginning of what’s unlawful about the Fed.

TAE reader and frequent commenter, TheTrivium4TW (website: Weapons of Mass Debt), has written a lengthy yet excellent article detailing the ways in which the Fed violates its Congressional mandate under the Federal Reserve Act for the benefit of minority corporate elites. In doing so, the Fed and its subsidiaries have quite literally taken up arms against the American people and waged war against our wealth, our lives, our peace and our freedom. We have been and continue to be threatened daily by weapons of mass debt-destruction.

Weapons of Mass Debt-Destruction

A covert, but very real economic war is being waged against the American people and the world at large. We realize that this extraordinary claim requires extraordinary proof – and this article provides the proof in spades. The proof consists of two pieces of information:

1. Federal Reserve Act, Section 2A (the black letter law governing the legal requirements of the Federal Reserve Board of Directors)

2. Debt to GDP Chart derived from the Federal Reserve Z1 (Debt) and the BEA GDP 1.1.5 (GDP)

Before digging deeper into the data and the logic that underlies this analysis, it is imperative that you have a good understanding of the mechanics behind exponential growth. The best explanation we’ve found is from Chris Martenson’s The Crash Course video presentation in Chapter 3 – Exponential Growth and Chapter 4 – The Power of Compounding.



If the behavior of exponential math is a new or difficult topic for you, feel free to watch Chris Martensen’s video a few times until it “clicks.”

Now that you have a good grasp of how exponential math behaves, let’s take a look at the actual text of the Federal Reserve Act’s Section 2A:

“Federal Reserve Act Section 2A. Monetary Policy Objectives The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates. [12 USC 225a. As added by act of November 16, 1977 (91 Stat. 1387) and amended by acts of October 27, 1978 (92 Stat. 1897); Aug. 23, 1988 (102 Stat. 1375); and Dec. 27, 2000 (114 Stat. 3028).] “ Federal Reserve Act, Section 2A

Please focus your attention on this key part of the law:

“…shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production…”

Before moving on, let’s define “commensurate”:

“Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. Measurable by a common standard; commensurable.” -The Free Dictionary by Farlex

Given the definition of “commensurate” is “corresponding in size or degree, proportionate,” note several key points:

1. The mandate is singular. It is not a dual mandate. Let me repeat – the Federal Reserve’s (The Fed’s) mandate is singular. Don’t trust us – read the mandate yourself!

2. “commensurate with” DOES NOT mean “grow exponentially compared to” under any circumstances. They are mutually exclusive concepts.

3. GDP is actualized “long run potential to increase production”.

Now, with those three key points firmly planted in your mind, let’s take a look at what the Board of Governors of the Federal Reserve System actually did, as evidenced in the following graph composed of Federal Reserve Z1 and BEA 1.1.5 data:



The Board of Directors of the Federal Reserve System knowingly broke Section 2A of the Federal Reserve Act and grew monetary and credit aggregates exponentially compared to actualized “long run potential to increase production.” Instead of following the black letter law and, to quote Section 2A directly, “maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production,” they chose to break the law, take monetary and credit aggregates exponential to the economy’s long run potential and blow the world’s largest credit bubble in human history.

News flash: They didn’t break the law to saturate society with debt “for the children.” It did, however, make lots of money for those who knew the criminal plan in advance, who had the “pulse” of all the financial data (including mortgage data) and who leveraged up to benefit from this fraud. Imagine having insider access to this criminal plot and, simultaneously, the financial internals of the country since 1980! That’s all essentially government-sanctioned insider trading against the American people.

Since Big Finance Capital controls the actions of the Federal Reserve through their corporate operatives that sit on the Federal Reserve’s Board of Directors, you can bet that their corprorate fronts benefitted immensely as this criminal bubble / bust operation is executed upon the American people. You can also bet that the insiders who hatched this societal asset stripping operation also benefit from the ultimat ein insider information on a personal level as well.

The takeaway here is that the Federal Reserve criminally broke Section 2A of the Federal Reserve Act in order to blow the world’s largest credit bubble in human history! The good news is that, if history shows us one thing, it is that bubbles always lead to a permanent “Shangri-la” state. Errr, not quite. Bubbles invariably end in a collapse that is basically proportional to the size of the {world’s biggest) bubble and there is no reason to believe that this time is different. Stoneleigh of The Automatic Earth covered some of these bubble / bust operations in her article entitled Bubbles and the Titanic Betrayal of Public Trust.

It is highly likely that nobody has ever revealed this truth to you in proper context and, therefore, it might be hard to believe (this isn’t meant for the TAE audience, but for all the people that they forward this link to in order to show that black letter law criminals are running our nation’s monetary policy). However, you don’t need to believe it to be true, you can prove it beyond any and all doubt yourself. Go to the source data, the law itself, the Fed Z1 data and the BEA data yourself. Put together your own chart. Believing what someone says is not the essence of knowing something to be true – and that includes anything I say.

The obvious follow up question is, “how did the Federal Reserve System Board of Directors get away with this criminal activity for the better part of 25 years without it ever being revealed to the general public?”

That’s a very good question, especially given the narrative that America has a “free press” and that government servants represent “the people.”

I’ve composed a list that pretty much answers the question:

1. The people behind the Federal Reserve System, including Ben Bernanke, lie about its mandate. In true Orwellian fashion, they’ve substituted the expected results (stable prices and low unemployment) into a package they refer to as a “dual mandate.” Please note that the Federal Reserve also breaks their falsely claimed “dual mandate.” Stable prices can’t, by definition, have a low inflation rate – or any inflation rate at all. The Fed stacks lies upon lies. The Federal Reserve System has a singular legal mandate, NOT a “dual mandate.” They broke it and now the “wheels are falling off” the exponential debt based Ponzi “economic cart,” exactly as any rational person would expect when provided with all the relevant information in the proper context. It is not conspiracy theory, it is basic mathematics.

2. Nobody in the establishment has exposed the criminal bubble blowing Federal Reserve operation. Sure, some people call them out for blowing credit bubbles, but they never point out that it was black letter law illegal to do so. Now, some will trick themselves into believing that this was a universal oversight of the billion dollar media (they’ve spent well over that amount in 25 years)… they just missed the biggest white collar crime in human history by “accident.” You know, they are “stupid.” We could call that view out as being naive, but that wouldn’t be very nice, productive or scientific. This one you will have to prove to yourself. Call up the major news networks yourself and reveal this crime of the Century (literally) to them. Surely, they will go to press with it right away, no? Or will they suppress the story, the same way they have universally done for 25 years running, and forward your name to the “Department of Lists” so that you can be properly monitored going forward?

You know, as a “threat” to the government that has sanctioned this Big Finance Capital Federal Reserve System Trojan Horse crime spree for 25 years running – with nary a single voice exposing it in all that time. By the way, the establishment includes more than the media. It also includes all politicians (including Ron Paul, “misguided academic” is not the same as “black letter law criminal”), all educational institutions (have fun running this truth by your economics professor!), it includes all major religious organizations, all major unions and every other main stream establishment organization. That’s not to say everyone involved in those structures is knowingly covering this up. However, it is to say that the evidence is strong that these institutions have been set up with a mechanism engineered to keep this kind of information “under wraps,” as ti were. Most people are probably compartmentalized, that is, on a “need to know” basis, and simply don’t know the truth any more than the average citizen.

3. Note that Section 2A has no penalty. In a very real way, it isn’t even a law, it is just bipartisan government sanctioned financial oligarch propaganda. Apparently, laws with real penalties, just like taxes, are only for “the little people.”.

The evidence presented in this article is proof, beyond any reasonable doubt, of a conspiracy to conceal the single largest white collar criminal operation in human history. If so, and all the evidence indicates it is so, they must have a mechanism for making sure this information doesn’t get on the air and into the hands of Joe and Janet Six Pack. After all, if Americans knew the truth, they might actually get off their lease to own couches and demand a more just monetary system. The Federal Reserve Board of Directors couldn’t stand for that now, could they? Remember, it is the Fed that funds the military and the police state – and they are only doing so with a high degree of confidence that both will work to serve their interests, not the interests of the people.

Our best analysis leads us to believe that Big Finance Capital uses their wealth, their ability to select “paycheck compliant” people to run their front corporation and their understanding of economic incentives to effectively manage and control much of the information that flows through to the general public.

Either these establishment institution leaders are directly part of Big Finance Capital or else they are financed and, therefore, controlled by Big Finance Capital and their corporate fronts – and they dare not offend those who finance them and financially provide for them. You know, don’t bite the hand that feeds you.

If so, it wouldn’t be the first time Big Finance Capital types have made an effort to seize control of the major media in order to limit both information and the context that reaches the general public:

“In March, 1915, the J.P. Morgan interests, the steel, shipbuilding, and powder interests, and their subsidiary organizations, got together 12 men high up in the newspaper world and employed them to select the most influential newspapers in the United States and sufficient number of them to control generally the policy of the daily press of the United States. These 12 men worked the problem out by selecting 170 newspapers, and then began, by an elimination process, to retain only those necessary for the purpose of controlling the general policy of the daily press throughout the country. They found it was only necessary to purchase the control of 25 of the greatest newspapers.

The 25 papers were agreed upon; emissaries were sent to purchase the policy, national and international, of these papers; an agreement was reached; the policy of the papers was bought, to be paid for by the month; an editor was furnished for each paper to properly supervise and edit information regarding the questions of preparedness, militarism, financial policies, and other things of national and international nature considered vital to the interest of the purchasers. This contract is in existence at the present time, and it accounts for the news columns of the daily press of the country being filled with all sorts of preparedness argument and misrepresentations as to the present condition of the United States Army and Navy and the possibility and probability of the United States being attacked by foreign foes. This policy also included the suppression of everything in opposition to the wishes of the interests served.

The effectiveness of this scheme has been conclusively demonstrated by the character of stuff carried in the daily press throughout the country since March, 1915. They have resorted to anything necessary to commercialize public sentiment and sandbag the national congress into making extravagant and wasteful appropriations for the Army and Navy under the false pretense that it was necessary. Their stock argument is that it is ‘patriotism’ They are playing on every prejudice and passion of the American people.” -Congressman Oscar Callaway, 1917 Congressional Record

While everyone is busy lying by commission, omission or ignorantly repeating false information, with the net effect of protecting a criminal Federal Reserve System, they are also lying / misinforming the public when they claim that society can grow its way out of debt. Up until the crash in 2008, debt had grown faster than GDP since 1980, as the following chart makes clear:



Not only did debt grow faster than GDP every quarter since 1980 up until the 2008 collapse, the trend was exponential debt growth compared to GDP growth! Of course, the politicians who claim that society can grow GDP faster than debt never provide their audience with the proper context. You see, it is much, much harder to lie to and deceive fully informed people, hence, the effort to keep you from being fully informed. Are you offended yet? Do you feel betrayed yet? If not, you aren’t paying attention.

Debt Money Tyranny, in all its forms, is a system that conveys wealth from productive society to the predator Big Finance Capital “bully” class. Not through hard work, more work, positive creativity and more sweat on their brow, but through a con game and a sophisticated, mathematical / Economics 101 monetary system based fraud and financial criminal activity sanctioned by the silence of all major political parties and candidate for 25 years running.

Read that again – “sanctioned by the silence of all major political parties and every candidate for 25 years running”. Remember this fact as you go to the voting booth this November.

The ongoing bust, which will almost assuredly be the biggest in human history, has its cause rooted in the same thing that caused the previous major depressions in human history – the bubble that preceded it.

In this case, the bubble was knowingly and illegally created by the criminal Big Finance Capital controlled Federal Reserve System Trojan Horse. Of course, the criminals will pretend to be “academics” or “out of touch” or “clueless.” The media they finance will promote that Big Finance Capital sanctioned narrative. They will sell anything they can to keep the general population from realizing that a criminal predator class is at work methodically manipulating the very nature of money and finance to systematically convey wealth and power from the general population to themselves.

Robbert Schiller blames the people for the bubble:

“A speculative bubble is a social epidemic whose contagion is mediated by price movements. News of price increase enriches the early investors, creating word-of-mouth stories about their successes, which stir envy and interest. The excitement then lures more and more people into the market, which causes prices to increase further, attracting yet more people and fueling “new era” stories, and so on, in successive feedback loops as the bubble grows.”

Note that Mr. Schiller doesn’t notify the reader that the Federal Reserve’s mandate is to prevent just such behavior in the market place and that the Fed not only didn’t do that, but they criminally promoted the bubble blowing by failing to regulate and creating the credit necessary to make the bubble possible in the first place.

Once one understands the underlying system, the gaping holes in “establishment” analysis becomes pretty obvious. The trick is to get people to 1) get the correct information to people and 2) get people to be more confident in their own data analysis than the various Big Finance Capital “Appeal to Authority” narratives.

Hopefully, you are much more knowledgeable about the root cause of the Federal Reserve’s bubble blowing than Robert Schiller after having read through this article – which is why you won’t be allowed to explain the root cause of the bubble on Bankstervision, aka, television. See how that works? It is really simple. Law abiding “clueless” people don’t break the law and then lie about it to cover up their crime spree. Criminals do that, not clueless people.

The lie proves that Bernanke and the Federal Reserve Board know something needs to be hidden from public view. People spend the time to develop spread lies for a reason. What are they hiding? How about the 100% verifiable fact they’ve broken Section 2A of the Federal Reserve Act for 25 years running and their persistent, covert criminal activity, that is literally hidden in plain view, resulted in the ongoing worldwide, societal impoverishing credit bust?

I get that this isn’t a comforting realization to accept – here’s an adaptation to a popular Upton Sinclair quote:

“It is difficult to get a person to understand something, when his comfort level depends upon his not understanding it!” -Yours truly, adaptation to Upton Sinclair quote

“The new law will create inflation whenever the trusts want inflation. From now on depressions will be scientifically created.” -Congressman Charles A. Lindbergh, after the passage of the Federal Reserve act 1913

“Under the Federal Reserve Act, panics are scientifically created. The present panic is the first scientific one, worked out as we figure a mathematical equation.” -Congressman Charles A. Lindbergh, The Economic Pinch, 1921

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. The one aim of these financiers is world control by the creation of inextinguishable debt.” -Henry Ford

“All the perplexities, confusion and distress (Ed. note – crime, poverty, substance abuse, family disintegration, government immorality and dishonesty, etc.) in America arise, not from defects in the Constitution or confederation, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation.” -John Adams

“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the Government at defiance. The issuing power should be taken from the banks and restored to the people to whom it properly belongs.” -President Thomas Jefferson

“The youth who can solve the money question will do more for the world than all the professional soldiers of history.” -Henry Ford, Sr

However, comfort level should not enter into our standard for determining what is real and then taking action based upon that information. The correct standard is simply whether the data and logic prove it be true and, if true, what are the appropriate countermeasures.

In my view, this clearly isn’t conspiracy theory, this is conspiracy fact that has been proven beyond any and all reasonable doubt. What isn’t reasonable, however, is to wait for the confidence people running their criminal bubble / bust operation to tell you what they are doing and how they are doing it before believing that they are doing it.

The solution is sunshine – disinfect the criminality, expose the perpetrators and their methods and lock both up so that the criminals and their crimes can’t escape again. That takes an educated and active population – and who else can educate the masses except those who know the truth?

Those who choose to be the reality-based community and who discern this information have their work cut out for them. There is no “cut out” solution. Most people are scared to death of even considering this could be true, let alone actively investigating the issues. To me, that just means we have to be more creative in our approach and put in some overtime.

There’s no time like the present to get this information out and expose the criminals who have knowingly and purposely put us in their situation – and make no mistake, they are intent on doing much violence to the average citizen across the world unless we get enough push back to put a stop to it.

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