Federal Reserve as Corporate Overlord and “Super-Cop”?

Federal Reserve as Corporate Overlord and “Super-Cop”?

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Written by Thomas R. Eddlem

Thursday, 29 January 2009 12:12

Congress is considering granting the Federal Reserve Bank dramatic new powers by this spring, according to the Washington Post for January 26. According to the Post, under draft legislation written by Financial Services Committee Chairman Barney Frank (D-Mass.), the Fed would “likely be given the power to gather information about the inner workings of banks, investment firms, insurance companies, hedge funds and any other entity big enough or so intertwined with other companies that it creates the risk of a systemic collapse." Image via Wikipedia "We need to give some regulator the power to restrain risk-taking that is excessive,” Frank told the Post. The Post report described the Fed’s role as that of financial “super-cop.” And the Republican Party appears to be willing to comply with a financial overlord. “There is agreement that we need a systemic regulator," Rep. Spencer Bachus (R-Ala.) told the Post. But Bachus also expressed skepticism over whether the Fed should be the “systemic regulator.” He — and the rest of the Republicans — should be skeptical that such powers should be given to the Fed, an unelected body not accountable to voters. The possibility for corruption is unlimited, and choosing the Fed as the recipient would be an example of the Peter Principle in action within government. Image by Getty Images via Daylife The Federal Reserve is responsible more than any other body for the current recession, more than the executives of AIG or even Bernie Madoff. The Fed caused the housing and banking crisis by deliberately and artificially lowering interest rates below the market rate for the past decade. These below-market interest rates not only caused a wave of money creation (inflation) through the banking system by encouraging more borrowing, but they also created malinvestments when borrowers took on more debt than they could afford to pay back — and more debt than they would have taken on if interest rates were dictated by the market. By artificially keeping the Fed Discount Rate lower than what the market would bear, the Federal Reserve Bank also gradually loosened banks’ lending standards on real estate. Real estate has long been considered one of the safest investments, but the long-term below market interest rates created a lending bubble that drove the prices of property artificially high. The inevitable housing bust lowered property prices nearer to market levels and made the banks insolvent. So Congress is considering giving overall authority for preventing a financial collapse to precisely the same quasi-government agency that created the current crisis. That’s about as dumb an economic strategy as President Obama’s plan to spend and borrow more money as a means to “stimulate” the economy. If the path to prosperity, as Obama’s plan implies, is to spend more and have record deficits, then why isn’t the economy already in hyperdrive? The federal government’s plans to "rescue" the economy seem destined to further the recession into a major depression. Photo: AP Images

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More Fright-peddling, More Bailouts

By a great American and my favorite author:

Written by William F. Jasper

Tuesday, 20 January 2009 03:54

Round two of the economic crime of the century has begun. On January 12, Lawrence Summers, President Obama's designee to become director of his National Economic Council, sent a letter to congressional majority and minority leaders seeking the second half of the $750 billion approved by Congress last October. Citing Obama's economic speech of January 8, Summers wrote: "As the President-elect recently stated, 'we start 2009 in the midst of a crisis unlike any other we have seen in our lifetime.'" As you no doubt recall, last September Congress, fearing the wrath of constituents, rejected a bailout scheme put together by the Bush administration and bipartisan leaders in Congress. Refusing to take "no" for an answer, the White House-Capitol Hill bailout gang (aided mightily by media collaborators) began a crescendo of frightening predictions of impending economic calamity, if Congress did not reverse itself and vote for the bailout. Economic apocalypse was upon us! Failure to act would mean global financial meltdown. Governments would fall. Global chaos would ensue. We were facing "the end of the world as we know it." Image via Wikipedia The ploy worked. Senators and congressmen who had resolutely opposed (or had pretended to oppose) the bailouts caved before the orchestrated chorus of fear mongers. Claiming they did not want to be responsible for a financial Armageddon, they flip-flopped and voted overwhelmingly for one of the biggest thefts in history. Senator Obama voted for that plan. Now Lawrence Summers and the chorus of fear are invoking the same specter of looming catastrophe to effect another huge raid on the American taxpayers, savers, and producers. "We must work with the same sense of urgency to stabilize and repair the financial system," Summers declares in his letter. "It was that concern that led the President-elect to support the financial rescue plan back in September. If we had not acted together — Democrats and Republicans — this economic crisis would have already become an economic catastrophe." According to Summers, President Obama "shares the frustration of the American people" and "believes the American people are right to be angry with the way this plan has been implemented." Obama "believes there has been too little transparency and accountability." But, Summers promises: "That will change when President-elect Obama takes office. Today, he is asking for the authority to implement the rest of the financial rescue plan because the American people need to know that going forward our government has the resources to do whatever is necessary to stabilize our financial system and protect our economy from potential catastrophe. With the first half of the rescue package now committed, President-elect Obama believes the need is imminent and urgent. We cannot afford to wait." Summers concludes his earnest appeal by noting: "President-elect Obama believes it is not too late to change course, but it will be if we don't take dramatic action as soon as possible ... [to] help our nation pass through this economic storm." Crisis, catastrophe, catastrophic, imminent, urgent, rescue, dramatic, storm, etc. We will be hearing much more of this fear-engendering rhetoric in the days ahead, coupled with promises that the implementation of this new bailout round will be a pristine example of "transparency and accountability." Those gullible enough to fall for this "trust me" line would also fall for the always ravenous (and ever impecunious) Wimpy's perennial line to Popeye and other suckers: "I'll have a hamburger today, for which I will gladly pay you on Tuesday." Next to Lawrence Summers, Wimpy appears a paragon of fiscal and monetary virtue — and a trustworthy credit risk. This is the same Lawrence Summers, remember, who, as deputy treasury secretary under Robert Rubin in the Clinton administration, designed the policies that drove Mexico's economy into the ground in 1995 with interest rates of 50-90 percent, and then bailed out the Mexican peso (and the Wall Street firms, like Rubin's partners at Goldman Sachs) to the tune of $50 billion. Since Congress refused to go along with that raid on the American taxpayers, Summers, Rubin, Clinton & Co. simply raided $20 billion from the Treasury Department's Exchange Stabilization Fund. The rest they got from the International Monetary Fund and the Bank for International Settlements. There never was any transparency or accountability for that deal. Ditto for Summers' 1998 U.S. Treasury-IMF bailout of the "Asian Tiger" economies and their Wall Street investors. Image via Wikipedia Summers' protégé and Obama's nominee to head the Treasury Department, New York Federal Reserve chief Timothy Geithner, is a key architect of the current bailout fiasco. Obama's choice of Summers and Geithner signals that the corruption and despoliation will continue — unless the American people force Congress to stop it. Image via Wikipedia

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Nationalized banks and The Times Spin

Written by Charles Scaliger

Saturday, 17 January 2009 18:06

In an unwonted episode of lucidity, the New York Times proclaimed in a recent headlilne that the "Rescue of Banks Hints at Nationalization." Of course, the Times got most of it wrong — nothing in the recent spate of bailouts bears the remotest resemblance to President Andrew Jackson's shutting down of the Second Bank of the United States, as banking analyst, Gerard Cassidy, quoted in the Times piece, claims.Image via CrunchBase Nor are the megabanks in question "too big to fail," as the Times implies. They're merely part of a power structure that America's political and financial elites, whose interests the Times represents and wishes to perpetuate. But Times writer Edmund Andrews has a point about nationalization. As the most recent bailout of Bank of America — a $120 billion aid package authorized last Thursday — shows, the federal government is determined to maintain our insolvent money-center banks at absolutely any cost, even if every American taxpayer must be beggared into the bargain. It was the comparatively sound Bank of America, after all, that was pressured by Treasury Secretary Henry Paulson and the Federal Reserve to put its own solvency on the line by absorbing Merrill Lynch last fall. That move crippled BOA, making yet another federal bailout necessary. It's worth noting that it was also BOA that protested the federal government's compelling of the big banks to accept partial government ownership of their assets late last year. All of this — federal government ownership of banks coupled with unending bailouts — indeed constitutes a nationalization of the American banking system, a move deeper into full-blown socialism that will soon wipe out America's remaining economic base if allowed to continue unchecked.

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0% INTEREST RATE TOO HIGH!

Study Claims Interest Rate of Zero Is Too High

Written by Brian Farmer

Tuesday, 27 January 2009 17:20

A recent analysis by Goldman Sachs, one of the Wall Street investment banks which benefitted from the recent federal government bailout, concludes that the Federal Funds rate (the interest rate charged by banks on loans made to other banks) is too high, despite the fact that the rate was reduced to a record low target range of zero to 0.25 percent by the Federal Reserve on December 16 of last year. As Goldman Sachs' chief U.S. economist Jan Hatzius put it in a research note, "We are entering a world with interest rates that are far too high for the economy's good." One can't help but wonder how an economist can seriously make such an argument, especially since it was inordinately low interest rates which contributed to the present economic crisis in the first place! That economic argument involves the concept of "real" rates, which is the interest rate adjusted for inflation. When the economy slows, the Federal Reserve can attempt to stimulate economic activity by reducing short-term interest rates to a level below the rate of inflation. For example, if inflation is running at five percent a year and interest rates are at three percent, then the "real" rate would be negative two percent. Negative real rates encourage people to borrow and spend, rather than save and invest, because inflation is eroding the purchasing power of their savings, and borrowed money can be paid back with the so-called "cheaper dollars" that result from an inflating money supply. The problem comes when the inflation rate drops to zero, which many economists expect to happen in the near future, as the economy continues to soften. With short-term interest rates already at virtually zero, the Fed finds itself in a bind: dropping interest rates below zero means that the Fed could borrow some amount of money now and pay back less than the borrowed amount later! But then no rational saver would put his money in the bank under such circumstances. The solution, according to the economists, is for the Fed to raise the rate of inflation to a level significantly above zero. The obvious way to do that would be for the Fed to create lots of money out of thin air and then spend it on everything from those toxic mortgage-backed securities that banks are holding to the infrastructure projects that President Obama keeps talking about. But even if hundreds of billions of dollars are created out of thin air, there is no guarantee that the money will turn up as loans to businesses and consumers. The hundreds of billions already spent by the federal government on the Troubled Asset Relief Program simply disappeared into the banking system, papering over the losses which the banks incurred on bad loans. To put it bluntly, a bunch of desperate and greedy Wall Street bankers used fear to get the federal government to rescue their jet-set lifestyles with our money. Is it any wonder that the blatantly self-serving Goldman Sachs report claims that the solution to all of our economic problems lies in the federal government giving them more money, or am I just being too cynical here!? We are told that we are in a crisis and that the federal government must act, before it's too late. But shouldn't we take at least a little bit of time and look at history, to see if we can learn from the experiences of others who may have faced similar problems? Are there no precedents to guide us? In fact, there are, and within living memory there is a precedent right here in the United States. The Obama administration wants to mimic the FDR administration of the 1930s and increase the role of the federal government in the American economy. The conventional wisdom would have us believe that FDR's New Deal programs ended the Great Depression. In fact, they caused the U.S. economy to falter for years longer than was necessary. After almost a decade of economic pain, FDR's Treasury Secretary made this 1939 entry in his diary, concerning FDR's New Deal economic policies: "We have tried spending money. We are spending more than we have ever spent before and it does not work.... After eight years of this Administration we have just as much unemployment as when we started.... And an enormous debt to boot!" It appears that we have not learned the lessons of history. We are now creating and spending money in almost unfathomable trillion-dollar chunks. The federal government is assuming enormous new powers, deciding which businesses will be allowed to fail, and which will be bailed out. The free-enterprise system that made the United States the wealthiest nation in history is being suffocated. We are being frog-marched toward socialism. And like the frog in the slowly heating pot that doesn't realize that it's being cooked and doesn't jump out to save itself, the bulk of the American public is oblivious to what is really happening. This article originally appeared at JBS.org and is published here with permission.

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When God is Cast from the Altar

When God is Cast from the Altar

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Written by Selwyn Duke

Tuesday, 23 December 2008 21:29

According to The Sun, Russia has experienced a series of murders, rapes, mutilations, and desecrations linked to Satanists. No, I did not say Stalinists, although, given how communists will persecute Christians, one could be forgiven for confusing the two. And a most horrific example of such ritualistic murder has just taken place in the nation's hinterlands, as a ring of Satanists has just killed and cannibalized four teens, three girls, and a boy. Writes The Sun: The gang of Devil worshippers butchered their victims and roasted them on a bonfire before devouring their flesh.... Their private parts had also been cut off in the sickening ritual in a rural area of Russia. After police arrested eight suspected members of the ring, one boasted how they had previously dug up the grave of a newly-dead girl and eaten her heart. It is easy to sensationalize the subject of "Satanism," although, of course, wholly unnecessary. It is also common nowadays for people, awash in moral relativism and its corollary of religious-equivalency doctrine, to dismiss the Satanic element of the event as just incidental. To them, these are just some bad kids who did a very bad thing. End of story. But let us not be so philosophically sloppy. Now, I am not going to address the matter of whether or not the Devil actually exists, and while I think those who claim Satanism does not really prescribe such barbaric rituals have taken rationalization to a new level, I will not belabor that. Instead, I will start with some simple facts. One is that this kind of savagery was ubiquitous throughout the world for most of man's history. Cannibalism and human sacrifice, attended by rituals not to be outdone by the most fertile horror writer's mind, were the norm. Oh, these acts were not usually committed in the explicit name of Satan; it might have been in that of the Aztecs' feathered serpent god Quetzalcoatl or one of 10,000 other names in 10,000 other places. What they had in common was not the name adorning their bloody altars but that which they either did not know or denied: Jesus Christ. If you think this will be straightforward evangelization, think again. I will spend no more time trying to convince that Jesus is God than I will trying to prove that the Devil was the first to reject Him. Instead, I will mention another fact of history: Christian civilization put an end to the aforementioned savagery. I will also mention a perception of mine, one that I am certain is correct and will be borne out over time: as we deviate from our Christian foundation, as we reject the Christian virtues, as Christianity continues to be demonized and demons trivialized, we regress to these dark norms of the past. There is yet another fact: we have seen brutal Satanic rituals in our nation, and such things have never been done in the name of much-maligned Christianity. Sure, they might have been committed by those born of Christian parents, but such miscreants might also be born of Democrat, Republican, black or white parents, or of those who are football fans. Such things are meaningless, as they amount to correlation no more than causation. After all, in other lands, these savages might be born of Buddhist, Taoist or Jewish parents, or of those who practice tai chi. All that these things reflect is location, not motivation. Yet there is an irrefutable correlation here, one strong enough to indicate causation: Virtually everyone who commits such acts renounces the Christian faith. A good example of this is one of the Russian teen perpetrators, a boy who was once a church-goer but got "fed up" with God and found that "things improved" when he started worshipping Satan. Really, though, this piece is not about Devil worship per se. There are not all that many Satanists around, and even if people do not believe in the Devil, not many would say that devilishness is good. But consider this passage from the Sun article: "Devil worshippers believe in putting themselves first and their core values include pride, indulgence, ambition and meeting sexual desires." Does this not sound an awful lot like the modern secularist creed? What set sends the messages, "If it feels, good, do it [indulgence, sex]," "Put yourself first [e.g., abortion]," and has peddled pride in the guise of self-esteem training, Christians or their adversaries? Yet critics may say that secularism does not explicitly prescribe these things in just the way Devil worshippers might say that Satanism does not explicitly prescribe what we associate with it. I will just smirk and say that I will not argue that here, as there is a larger point to be made. It is said that evil is the absence of good just as darkness is the absence of light. Thus, what do you think man's nature is in the absence of good? (Interestingly, it is precisely what it is absent Christianity.) Forget Jean-Jacques Rousseau's naive musings about how children, when left to their own devices, will evolve into angels; the truth is that, unless a powerful brake is placed on will and appetite, they devolve into demons. Philosophers may argue about whether our nature is naturally bad or supernaturally fallen, whether the remedy is psychology or grace, but about the practical nature of that nature there is little dispute. And it rears its ugly head, unless someone — or something — can cage the beast. Therefore, to say that this or that philosophy, religion or ideology did not prescribe a given evil misses the point. At issue is not merely what a philosophy does but also what it fails to do. Without adequate moral constraints, people are animalistic, which is why cannibalism, human sacrifice and slavery have been the rule of history, not the exception. Why did we long ago identify "Seven Deadly Sins"? It was not because it made for good Shakespearean plays or Bible stories, but because man naturally exhibits lust, greed, sloth, gluttony, envy, wrath, and pride. So saying that a philosophy does not teach these things (and some do) is simply akin to stating that it does not prescribe a given frailty of man's nature; it is like saying that an administered medicine did not cause the disease, it just did not cure it. Perhaps the major reason why we formulate our philosophies is to mitigate man's flaws, to improve his condition. Thus, if a given one does not serve that end, it is at worst harmful, at best useless. This is why, of all the criticisms of Christianity, perhaps the silliest is that it is unrealistic. What it asserts about God's nature can always be argued, for it is hard to prove the divine, but what it teaches about man's nature is so perfect it seems divinely inspired. Thus, while some may scoff at the mystical and metaphysical and claim the faith is mythological, note that it is, above all, practical. In other words, a typical psychologist — a person secular to the core — may dismiss talk of Jesus forgiving sins and performing miracles. Yet, if he truly understood his craft and Christianity, he would at least have to cede that the faith is a brilliant cure for our "disease." Not only did Christianity define man's characteristic faults with scientific precision, it then prescribed the remedy of holy virtues. Lust was countered with chastity, gluttony with temperance, greed with charity, sloth with diligence, wrath with patience, envy with kindness, and pride with humility. We may now consider these virtues self-evident and take them for granted in the same way that Rousseau was so immersed in Christendom that he could take civilization for granted and assume that children naturally became moral. But, for example, pride was not always considered a grave flaw, or, in the least, man did not always have a perfect yardstick of humility that could reveal even its most subtle, deceptive or universally accepted and admired forms. Why, for much of history, the man to pattern yourself after did not ride a mule and wash others' feet but was a bloodthirsty warrior with an ego whose proportions matched his lust for power. It was "What would Alexander the Great do?" I suppose. Certainly, it was his example the young Julius Caesar lamented not living up to. Let us consider another aspect of Christianity as cure. Many high-profile atheists, such as Christopher Hitchens — who was recently parading about the country peddling his irreligious book — argue against the faith with a point they seem to think is somewhat deep and clever. They say that an atheist is actually more virtuous than a believer because when he acts rightly, it is not because he fears eternal punishment but simply because it is the "right" thing to do. Thus, the atheist's is the higher, more evolved motivation. Yet, if these critics ever determined to "know thy enemy" and bothered to study the theology of what they condemn, they would not feel so clever. Long before psychology was born (interestingly, the word "psychology" means "study of the soul" {from "psyche," Greek for "soul"}) and Erik Erikson taught about the stage of "psycho-social development" in which a person only understands that something is wrong if he is punished for it, Church fathers understood that people existed in different stages of moral development. Sure, it is ideal when people do the right thing simply for the sake of it, but what of the many who do not? Does a good psychologist ignore this swath of humanity, this widespread phenomenon of man? Thus did the Church talk of love and fear of God and promulgate the teaching of perfect versus imperfect contrition. Perfect contrition is ideal; it is when one is sorry for a misdeed because he loves God and violated His laws (in secular terms, loves what is right and violated it). Imperfect contrition is when one is sorry simply because he fears punishment. While being in the latter state is not ideal, having something to mitigate it certainly is. Thus, we can argue about whether Heaven and Hell exist, but can their value as the ultimate positive reinforcement and ultimate disincentive for the less morally evolved be disputed? I don't think so, and I suspect that Dr. Erikson, who grew closer to Christianity later in life, would have agreed. Of course, as a man of faith, I am not merely a utilitarian with respect to Christianity. Yet its utility is striking. People argue about whether it is an expression of the divine or just an invention of man, but what is overlooked is that if it did not exist, we would have had to invent it. Or, at least, something virtually indistinguishable from it. That is, if we could.Image by relandee via Flickr Really, a fair hearing finds that Christianity fits fallen human nature not like a glove, nor like a straightjacket, but like a form-enhancing garment that minimizes faults and accentuates strengths. And, at the end of the day, its critics are motivated more by fear of Truth than love of it; they are attached to their misshapen forms and fear that the garment will somehow fall on their shoulders. Why, Christopher Hitchens himself has admitted that he does not want God to exist, that he dislikes the concept of an eternal rule maker. And comedian Bill Maher, another noted atheist, once said "The concept of Absolute Truth is scary." It sure is — when you fear it will spoil your fun or puncture your pride. Ego, by the way, can so fill the Church of Self that there is no room for God to enter. Thus, our modern-day Pauls of Tarsus may boast about how their worldly philosophy begets more heavenly motivations. But given what drives them to cast God from the altar, it is their own moral evolution about which they should wonder.

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The Secret Life Of Binyamin Netanyahu

by Allen Woodham Editor ~ South East Christian Witness ~ South Aust. Feb. 1997...allenwoo@dove.mtx.net.au

The Secret Life Of
Binyamin Netanyahu

Even within the conventional story, it is clear that Netanyahu was groomed for leadership by the Council On Foreign Relations (CFR) in New York. In 1979, twenty-seven year old Netanyahu called a conference on terrorism and the ruling elite of the CFR, Bush, Shultz and Perle answered to his summons. One word will suffice: why?

Yoni Netanyahu was undoubtedly a martyr but far from the only one in Israel. He was not such a powerful symbol that the CFR would send a delegation of its biggest guns, including CIA director Bush to his unknown brother's get-together.

Netanyahu's decision to quit his lucrative Boston job is almost inexplicable. Netanyahu sought a highpaying job at a prestigious consulting firm yet not two months later, he gave it up to fly back to Israel and sell sofas. He was barely settled in back home when he decided to organize an anti-terrorism conference and invite the most powerful people in Washington to attend.

It is possible that Netanyahu was told to quit his job, return to Israel and arrange the conference. Perhaps there is a connection to the fact that a year later Shultz made fighting terrorism a first priority of the Reagan administration and that Vice-President Bush was appointed to head a front for illegal covert activities called The Anti-Terror Task Force.

Arens' offer of a deputy ambassadorship to salesman Netanyahu made no political sense. Israeli diplomatic aides and deputies typically rise slowly through the Foreign Ministry bureaucracy. They are not thrust into the second highest position at the most vital embassy in the world. It is far from impossible that Arens was directed to bring in Netanyahu by the very people in the Reagan administration who attended his conference three years earlier.

Once in New York in 1984, CFR-affiliated media such as CNN, the New York Times, Washington Post, Newsweek and CFR members Koppel and King turned Netanyahu into a major political figure; so much so that George Shultz became a close friend. We again ask the succinct question: years Netanyahu's senior, find so amusing about the Israeli UN Ambassador that he had to pay him a courtesy call every time he flew to New York? In 1985, Shultz chaired another Netanyahu-organized conference on terrorism, this time in Washington. The resulting publicity and prestige was a significant factor in Netanyahu's fast-rising political career. Clearly, the Secretary-of-State had a major stake in Netanyahu's future. Which means, so did George Bush.

All that can be concluded from the conventional story. What then do we make of Bibi's secret life?

In 1987, Netanyahu applied for credit using his American social security number 020364537. With that number, he or someone else made the application under a phony name, John Sullivan, living at a false address in Northern California.

Netanyahu used Sullivan's name to borrow money during 1987-88. John Sullivan does not exist, nor does Netanyahu's credit file. Israeli and American reporters who tried to dig into Netanyahu's past using his social security number discovered two other phony names used to apply for credit in 1987-88 but were perplexed to find that his credit records were completely removed. Only someone very high up in the American government could have authorized the erasing of the file.

We return to the all-purpose question: why? Again, no one who knows is talking. What is nearly certain is that while Netanyahu was the UN Ambassador, he was either defrauding a credit company or on an assignment involving money that required three identity changes.

Then there is Netanyahu's close relationship with Congressman Ben Gillman, head of the House Committee On International Relations. The problem here is that Gillman was also a close associate of Shabtai Kalmonovitch and shared business deals with him in Africa. Kalmonovitch was, not long after, imprisoned in Israel as a KGB spy. This is not to imply that Netanyahu was involved in spying, only that his closest ally in Congress has mighty strange intelligence ties to Israel.

And what to make of the mystery of Netanyahu's housing? Before he was even the leader of the Likud, two foreign businessmen, Jack Mandel of Australia and Sandy Eisenstadt of the US each paid about $750,000 to buy Netanyahu luxury apartments in Tel Aviv and Jerusalem. Again, no one has a clue why. There is speculation that part of the reason may be Eisenstadt's stake in an Israeli oil exploration company, a shady and hidden business, but no concrete connection has been discovered by the Israeli media.

Netanyahu's penchant for secrecy is not subtle. It is well-known among the Israeli media that he had conducted a number of secret meetings with the Jordanian royal family in London and Amman before he became prime minister. Even the conventional Jerusalem Post reported in mid-June that six secret meetings were held in the past two years. But when Inside Israel, just before the elections, asked Netanyahu to comment on the meetings he denied they had ever taken place.

Perhaps the most secret and worrying ties concern what is supposedly Ahronot relates how Netanyahu wooed a local Likud leader. ``He was invited by Netanyahu to a meeting in his office at Systematics in Ramat Gan. The head of the company,

Oded Levental is a candidate for a financial post in the new government.''

Systematics is at the core of serious research by American alternative publications, including the usually reliable Media Bypass. In short, the allegations are that the National Security Agency had handed Systematics stolen software called Promis that opened a trap door to the world's secret banking transactions. About 250 Americans, mostly politicians, had their illegal foreign accounts emptied of over $3.5 billion in the operation. It is claimed that Colin Powell dropped out of the presidential race after his account electronically vanished. Leading figures in the operation included George Bush, Caspar Weinberger and two Arkansas attorneys, Vince Foster Jr. and Hillary Rodham Clinton on behalf of Clinton financier Jackson Stephens. The research invariably concludes that Foster was murdered because he knew too much about the scam.

A leading investigative writer, Sherman Skolnick, writes:

``Some contend Systematics is an NSA proprietary and spies on banks overseas. Can Systematics rightfully deny spying actually done by buffers or cut-outs between Systematics and NSA? Systematics, through a spokesperson, vigorously denies Foster assisted it in any spying on foreign banks but reImagess apparently silent on whether Hillary Rodham Clinton assisted Systematics in some nefarious activities.''

Is it fair to ask why Systematics provided Netanyahu office space and if this was the sum total of its involvement with him?

Since taking office, Netanyahu has fueled fears of international control by his actions within Israel's tiny anti-NWO community. They were most intrigued by his refusal to give Ariel Sharon a sensitive cabinet post. One possible reason is fear of Sharon's own intelligence arm in the US. Then for those people who fervently hoped that he would rid himself of any connections to the Arye Deri scandal, with all its implications of money laundering and perhaps murder, Netanyahu appointed as his Justice Minister, Yaacov Neeman, a lawyer who is currently being investigated for intimidating a key witness against Deri in a London trial.

But the topper was Netanyahu's decision to allow Yaacov Frenkel to run the country's economy single-handedly. Frenkel worked for the World Bank between 1971-1990. After nineteen years away from ``home'' Frenkel was unexpectedly appointed head of the Bank of Israel.

His policies mirrored the world-wide debt program of his previous employer documented by numerous researchers. The plan involves raising interest rates beyond what the public or industry can afford, and forcing the government to borrow lots of money from American banks to keep the populace pacified. When the debts have to be repaid from an empty treasury, the International Monetary Fund bails out the country with schemes guaranteed to impoverish the people.  ŠFrenkel was a proponent of Israel borrowing $10 billion in loans guaranteed by the American government and he kept his interest rates as high as he could in the face of opposition from then Finance Minister Avraham Shohat who suspected Frenkel, ``was playing politics with the Bank of Israel.''

Binyamin Netanyahu, the man who Inside Israel hoped would save Israel from the NWO puppet regime of Peres, appointed Yaacov Frenkel to be his Minister of Finance. The only thing that prevented the disaster was party opposition to an appointee who had never publicly supported the Likud.

Dan Meridor got the post instead. But as the Maariv headline read: ``Meridor Will Act, Frenkel Will Lead.'' On his first day in office Meridor announced that his policy would be to lower the standard of living in Israel. Not a week later, Frenkel raised the interest rates by a whopping 1.5% with Meridor's ``approval.''

Something is going on behind the scenes at the CFR. While Secretary of State Warren Christopher must appear to be opposing Likud government policies to keep the Arabs in line, the former CFR director is playing some kind of double game with Netanyahu.

King Hussein made his accommodation with Netanyahu well before the elections and refused to support Peres during the campaign. Netanyahu's victory clearly delighted him and on the surface, why not? The last thing he would want is a PLO state on his border with control of the Moslem holy sites. In time, it will become clearer what Netanyahu promised the King during the secret London meetings. Included, most assuredly, will be Jordanian hegemony over the Temple Mount.

There has been a transformation in Israel but the CFR is still running the latest prime minister. And that is a good reason for intense fear about Israel's future.

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For The Sake Of Freedom

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Article by G. Edward Griffin FFI

Totalitarianism is on the rise everywhere because advocates of big government have taken leadership control of the power centers within every society. Power centers are organizations and social groupings – such as political parties, labor unions, church groups, media centers, and professional societies – that hold political power based on their claim to represent their members and on their ability to lead public opinion. It has taken many years for them to achieve this dominance over society, but they have succeeded. It does no good to complain or to theorize about what should be done. As long as advocates of big government hold the power, nothing will change.

WE MUST NOT BE LIKE CATS
One of the most profound differences between dogs and cats is that cats focus on effects while dogs focus on causes. If you toss a pebble at a cat, it will look at the pebble. If you toss it at a dog, it will look at you.

In this respect, too many people are like cats. They are preoccupied with the details of their loss of security, freedom, and privacy, and they flutter like wing-clipped pigeons, complaining about this and that without knowing why these things are happening. By contrast, members of Freedom Force focus on the cause and work to eliminate it. The degeneration of civilization is not the result of blind forces of history operating beyond comprehension or control. It is planned and caused by a small but well defined group of people who believe this decline is necessary for what they fondly call The New World Order but which we recognize as high-tech feudalism in which mankind will be condemned to live in perpetual subservience to elitist rulers.

The identities of these elitists are known. They have names. They belong to organizations. They meet together to create strategies and they work jointly to implement them. They dominate the power centers of society. We will not escape their plans by looking only at what they are doing. We must focus on them and remove them from their present positions of power. Any other plan of action is doomed to failure.

That, however, is not enough. If we focus solely on the identities and personalities of those who are promoting the decline of liberty, we will be stumped by the fact that, even if we should succeed in removing them from their positions of influence, there are many more just like them waiting to step into their places. In the final analysis, it’s not the names and identities or political party affiliations of these individuals that matters as much as what they believe, what ideology they hold. Their ideology has a name. It’s called collectivism, a concept that government is master and people must obey. It’s to no avail to remove one collectivist from power only to replace him with another one – which has been the pattern for all too many years. It is time to stop acting like cats, stop being forever fascinated by the personalities and deeds of our leaders. We must be more like dogs and focus on the ideology of our leaders, because that is the cause of their deeds.

The solution is simple. It is to take back control of the power centers of society, one-by-one, just the way they were captured in the first place. Replace the collectivists with people who have no personal agendas except to defend freedom. This will unleash the vast human potential for prosperity and happiness that can be realized only in the absence of government oppression. However, to reach that goal, it will be necessary for those who cherish freedom to do more than complain and far more than just casting a vote every few years. They must reach for power. That is the reason for the motto of Freedom Force: Impotentes defendere libertatem non possunt, which is Latin for “Those without power cannot defend freedom.”

The Freedom Force strategy can be summarized as:
Don't fight city hall when you can BE city hall

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HARD TRUTH ABOUT HARD MONEY

Written by Patrick Krey

Friday, 14 November 2008

In our Republic's youth, presidential candidates openly debated central banking, and Andrew Jackson even won election as a "hard-money" advocate. Today's economic crisis requires a similar return to sound monetary policy. An economic crisis struck America seemingly out of nowhere. The nation was firmly in the grasp of a sharp financial downturn. The citizenry was unsure of its cause, how seriously it would endanger the nation's future, and how long it would last. Fear and confusion spread while a select few with a deep understanding of the monetary system attempted to educate the people about the real cause of the financial crisis. These individuals argued that the inflationary policies of the national bank were the root cause of the crisis and that the only solution was a sound monetary policy based on hard currency. Thus began a vigorous public debate over the American monetary system and its role as the culprit of the current economic downturn. This "hard money" populism began to gain momentum with the masses. Numerous politicians were educated about the need for sound currency and were motivated to speak out against the central bank and its detrimental policies. The movement eventually rose to national prominence, and the American people elected a proponent of a hard-money system to the presidency. That president succeeded in putting an end to the national bank. The aforementioned scenario might sound like a potential solution to the current economic crisis facing America, but it has actually already occurred in American history. These events took place following the financial panic of 1819. The followers of the populist hard-money movement have become what we now refer to as Jacksonian Democrats because they succeeded in electing a hard-money advocate, Andrew Jackson, to the presidency. The Bank of the United States Today's substance- and issue-free presidential debates bear little resemblance to those of the first one hundred or so years of our Republic's history, which saw candidates discussing the intricacies of monetary policy. At that time, the issue of central banking and monetary policy typically played a vital role in the national debate between the presidential candidates. The presidential debate over central banking dates all the way back to the days of our first president, George Washington. It was during Washington's administration that then-Secretary of the Treasury Alexander Hamilton proposed the creation of America's first central bank, the Bank of the United States (BUS). Washington asked his Cabinet members to submit letters to him with their own personal assessment of Hamilton's proposal. Then-Secretary of State and future President Thomas Jefferson claimed that the BUS was unconstitutional on two grounds: there was no clear authorization to be found within the document itself, and the states would have been hesitant to ratify a Constitution that allowed the federal government the power to create a national bank. The incorporation of a bank and the powers assumed have not, in my opinion, been delegated to the United States by the Constitution. They are not among the powers specially enumerated.... It is known that the very power now proposed as a means was rejected as an end by the Convention which formed the Constitution: a proposition was made to authorize Congress to open canals, and an emendatory one to empower them to incorporate but the whole was rejected, and one of the reasons urged in the debate was, that then they would have power to create a Bank, which would render the great cities, where there were prejudicies [sic] or jealousies on the subject, adverse to the reception of the Constitution. Hamilton opened the door for liberal interpretation of the Constitution with his opinion that the Constitution's "Necessary and Proper Clause" implied authorization for the federal government to create the BUS. This implied authorization argument was cemented as early constitutional law by Supreme Court Chief Justice John Marshall, a Hamiltonian, with the decision of McCulloch v. Maryland.* Washington was swayed by Hamilton's argument and the BUS was established in 1791 with a 20-year charter. This ideological split within the Washington administration would lay the framework for future debate over monetary policy. The free-banking argument, as opposed to an argument backing a central bank, was heavily influenced by the failure of fiat (unbacked) paper "continental" currency during the Revolutionary War. In an effort to fund the war effort, the Continental Congress printed vast amounts of currency not backed by gold or any other commodity, thereby depreciating its value over time. This episode of currency depreciation by government action gave us the phrase "not worth a continental." The supporters of a free-banking system did not want to return to this type of hyperinflation and therefore wanted a currency backed up with specie (gold or silver) that would be 100 percent redeemable on demand. The central-banking argument was motivated by the desire for increased liquidity, as its advocates wanted banks to be able to loan out more money than they had on hand in order to spur investment, which would require a central bank to act as "a lender of last resort." The central-bank supporters also wanted a fiat currency, one that derives its value from government mandate, and fractional reserves (not requiring 100-percent redeemable reserves). As libertarian pioneer Murray Rothbard explains, the Hamiltonians were in favor of "paper money, fractional reserve banking, and central banking ... as part of a comprehensive policy of inflation and cheap credit in order to benefit favored businesses." The Jeffersonian opponents of the central banking system, on the other hand, preferred "a hard money system based squarely on gold and silver, with banks shorn of all special privileges and hopefully confined to 100 percent specie banking." Jefferson would later go on to win the presidency and continue to speak out against the dangers of the BUS. [The] Bank of the United States ... is one of the most deadly hostility existing, against the principles and form of our Constitution.... An institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical moment, upset the government. I deem no government safe which is under the vassalage of any self-constituted authorities, or any other authority than that of the nation, or its regular functionaries. What an obstruction could not this bank of the United States, with all its branch banks, be in time of war! It might dictate to us the peace we should accept, or withdraw its aids. Ought we then to give further growth to an institution so powerful, so hostile?" Although Jefferson's resistance to the BUS never succeeded in rising to a level of abolishing the bank and he was not able to undermine the BUS during his presidency, his criticisms did help to turn public opinion against the bank when its charter came up for renewal in 1811. The administration of James Madison, the successor to Thomas Jefferson, was not as opposed to the BUS and actually fought for its recharter! This might seem contradictory because 20 years prior, Madison argued in the House of Representatives against the BUS on constitutional grounds. Years later, Madison would write a long and meandering defense of his nuanced position proclaiming that it was not a flip-flop. After assuming the presidency, Madison found his Jeffersonian limited-government ideology challenged as his administration became embroiled in a war. The War of 1812 cemented Madison's attitude change toward central banking. The excessive borrowing to fund the war led to a renewed drive to establish a second BUS, and Madison led this concerted effort to reestablish a national bank. The Second Bank of the United States (BUS) was established in 1816 during Madison's second term. The BUS immediately began acting as an expansionary force. This easy credit led to a "boom" with overinvestment in real estate, sharply raising property values. The expansionary policies of enormous inflation of money and credit, combined with massive fraud at the BUS, put the bank at risk of being unable to make payments in specie. Therefore, the BUS began massively redeeming its heavy balances and notes to fully restore its ability to make payments. This contraction of money and credit led to the inevitable bust which came to be known as the Panic of 1819. This panic further encouraged growth of the more stridently "hard money" Jacksonian movement. (This Jacksonian movement would also include other national figures such as Senator Thomas Hart Benton and future President James Polk as well as prominent economists of the day.) The Jacksonian movement was focused on eliminating fractional reserve banking. As Rothbard explains, "The Jacksonians ... pinned the blame for boom-bust cycles on inflationary expansions followed by contractions of bank credit.... They believed that government should be confined to upholding rights of private property. In the realm of monetary sphere, this meant the separation of government from the banking system and a shift from inflationary paper money and fractional reserve banking to pure specie and banks confined to 100 percent reserves." Jackson himself pulled no punches when speaking about the central bank: "[The national bank was] dangerous to the liberty of the American people because it represented a fantastic centralization of economic and political power under private control." One of the crowning achievements of Andrew Jackson's presidency was the elimination of the Second BUS, which he accomplished with a veto of its charter renewal. Jackson gave a stirring speech after the controversial veto explaining why there was a need to eliminate the BUS. In his lengthy and groundbreaking veto message, Jackson touched on the dangers of central banking as well as the separation of powers and the importance of a strict constructionist interpretation of the U.S. Constitution. It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes.... Most of the difficulties our Government now encounters and most of the dangers which impend over our Union have sprung from an abandonment of the legitimate objects of Government by our national legislation, and the adoption of such principles as are embodied in this act. Many of our rich men have not been content with equal protection and equal benefits, but have besought us to make them richer by act of Congress. By attempting to gratify their desires we have in the results of our legislation arrayed section against section, interest against interest, and man against man, in a fearful commotion which threatens to shake the foundations of our Union. The Jacksonians were not able to enact their entire hard-money agenda, but they did succeed in eliminating all traces of centralized banking. Even after the abolition of the Second BUS, monetary issues were routinely debated and discussed at the national level. Martin Van Buren, who assumed the presidency after Jackson, called for "a total separation of bank and State through an Independent Treasury." The Independent Treasury required the government to hold all monetary balances in the form of specie, rather than bank notes or deposits. Van Buren accomplished this after a long and bitter political battle with opponents. Economic historian Jeffrey Rogers Hummel wrote that the Independent Treasury introduced a period of "massive financial deregulation at the national level and one of the most stable monetary systems in American history.... Laissez-faire was the Independent Treasury's primary consequence. There was no nationally chartered bank, the Treasury for the most part avoided dealing with the many state-chartered banks, and the only legally recognized money was gold and silver coins. Because the economy's currency consisted solely of bank notes redeemable in specie on demand, private competition regulated the circulation of paper money." This system ensured stability in the money supply and also kept the nation safe from inflation. Ultimately, the Jacksonians succeeded in removing the federal government from the banking system and returning its finances to a specie foundation. The Advent of Greenbacks Over the following decades, there were always politicians clamoring for a return of some type of central banking, while others constantly reminded the voters of previous harms caused by it and of the need for sound monetary systems based on hard currency. It was not until the Lincoln administration and the need to fund the Civil War that a version of central banking returned in the form of a series of National Currency Acts that took America off the gold standard. The National Currency Acts of 1863 and 1864 established a network of nationally chartered banks that would issue bank notes supplied to them by the federal government. These notes, referred to as greenbacks, immediately returned inflationary power to the federal government. In this new system, the U.S. Treasury had control, with some legislative oversight, over all U.S. paper currency, as well as regulatory power over large sectors of the banking industry. The National Currency Acts granted the monopoly of all bank notes to federally chartered national banks. Of course, with this new legislation, inflation of the money supply soon followed. Greenbacks began to depreciate in value almost as soon as they were issued. The money supply ballooned and, over the course of the war, rose 137.9 percent! With the drastic increase in the money supply, there was also a sharp increase in the price of goods, and prices rose 110.9 percent from 1860 to the end of the Civil War. It was not until several years later and the administration of Ulysses S. Grant that substantial steps were taken to halt the expansion of the money supply and return the national currency to a hard standard. The national debate over the monetary system raged throughout the 1870s until the Grant administration signed a bill in 1875 which would resume specie repayment of paper dollars in gold at prewar levels by 1879. Specie payment finally did resume in 1879 under President Rutherford Hayes. Unfortunately, the centralized banking semi-cartel established by the National Currency Acts was not undone. The gold standard would still be a highly controversial subject in the national debate, and there were attempts to bring back or add silver to the monetary standard. The goal of bimetallism, where the monetary standard is a ratio of gold to silver as fixed by government mandate, was a return to increasing the money supply due to the abundance of silver while hiding under the banner of hard currency by using a commodity. President Grover Cleveland fought vigorously to preserve the gold standard even at a time when his own party was split bitterly over the money issue. Sadly, Cleveland was one of the last presidents to strongly support the gold standard. Political divisions and realignment among the Democratic and Republican parties changed the foundations of the parties and moved both away from hard-money stances. Rothbard explained that the political changes at the end of the 19th century meant the end of America's great laissez-faire, hard money libertarian party. The Democratic Party was no longer the party of Jefferson, Jackson, and Cleveland. With no further political embodiment for laissez-faire in existence and with both parties offering 'an echo not a choice,' public interest in politics steadily declined. A power vacuum was left in American politics for the new corporate state ideology of progressivism, which swept both parties ... in America after 1900. The Federal Reserve Is Born At the beginning of the 20th century, progressivism was a bipartisan effort that succeeded, over the course of the first three decades of the new century, to transform the American economy from laissez-faire to one of "centralized statism." From this point forward, there was a concerted effort to centralize the banking system even further. Inflationist policies were promoted by both major parties. President Theodore Roosevelt called for new legislation to increase elasticity in the monetary system — that is, to increase the money supply. By 1906, he was calling for "a considerable increase in bills of small denominations." His successor, William Howard Taft, was even more progressive in his inflationist intentions. "One of the reforms to be carried out . . . is a change of our monetary and banking laws, so as to secure greater elasticity . . . and to prevent the limitations of law from operating to increase the embarrassment of a financial panic." The election of Woodrow Wilson in 1912 was the culmination of the progressive movement's efforts to have one of their own as the president, and the beginning of America's current central banking system. In 1913, Wilson signed the Federal Reserve Act into law, establishing the Federal Reserve System. In 1933, under the administration of Franklin D. Roosevelt, Fed notes and deposits were no longer redeemable in gold to Americans. In 1935, the Fed was reorganized to centralize control in Washington. In 1971, under the administration of Richard Nixon, the dollar was no longer redeemable in gold to foreign governments and central banks. In the years since the Federal Reserve was created, almost all restraints on the Fed have been lifted, and it now has the unlimited power to inflate the money supply. Monetary Debate in Modern Times Sadly, in modern times, the presidents have failed to even address the issue of monetary policy of the central bank other than to praise the Fed as a savior in times of financial crisis. In addition, any efforts by Congress to make the Fed more transparent or accountable have actually been resisted by presidential administrations. Shortly after President Clinton was inaugurated, the Democratic Chairman of the House Banking Committee introduced some proposals which would open up the Fed to public scrutiny. He was rebuffed in his efforts by the new president, who felt that such measures might "undermine market confidence in the Fed." The Clinton administration also expressed concerns about what such reforms would do to the independence of the Fed. Economist Thomas DiLorenzo questioned that independence with his research, showing that Fed chairmen typically adjust their growth policies based on the wishes of the current administration. President Eisenhower wanted slower money growth. The money supply grew by 1.73 percent during his administration — the slowest rate in a decade. President Kennedy desired somewhat faster money creation. From January 1961 to November 1963, the basic money supply grew by 2.31 percent. Lyndon Johnson required rapid money creation to finance his expansion of the welfare/warfare state. Money-supply growth more than doubled to 5 percent. These varying rates of monetary growth all occurred under the same Fed chairman, William McChesney Martin, who obviously was more interested in pleasing his political master than in implementing an independent monetary policy. DiLorenzo further explains that Martin's successor, Arthur Burns, was such a strong supporter of Nixon's that he engineered a huge expansion of the money supply to help Nixon's reelection. Then, when President Ford advocated slower monetary growth, Burns did as he was asked and provided a 4.7 percent growth rate. Finally, Burns deferred to Jimmy Carter and increased the growth rate to 8.5 percent. Fed Chairman Paul Volcker also complied with President Reagan's wishes by supplying rapid growth initially and then slower growth. Fed Chairman Alan Greenspan also was accommodating to both Presidents Clinton and Bush. These figures would seem to explain the close relationship between the president and the Fed chairman. In 2003, President George W. Bush heaped praise on Alan Greenspan and told the press his wish that Greenspan could serve another term, despite the fact that under Greenspan's tenure, prices increased 71 percent (compare this to the fact that the price level was relatively the same in 1900 as it was in 1800). And over the course of Greenspan's tenure, the money supply rose from $3.62 trillion to over $10 trillion, a 179-percent increase! The Struggle Continues For nearly the first 100 years of our nation's history, presidents debated central banking and monetary policy. A titanic struggle was waged between free bankers and central bankers, with the pendulum swinging back and forth in their struggle. This public debate came to an end in the 20th century when both major parties adopted the inflationist line. Today, the Fed is an unquestioned money machine that supplies the president with enough cash to fund his extravagant government programs, be they vast expansions abroad or at home or both. The presidential candidates rarely question what effects these large increases in the money supply might have on future generations as the dollar is devalued and Fed-manufactured booms and busts rock our economy. It does seem like wishful thinking to believe that a modern-day Jefferson or Jackson or even a Van Buren or Cleveland would rise to national prominence and return anti-inflationist positions to the debate about monetary policy. But we should not forget that past hard-money movements were not accomplished by the work of one man but, rather, by a concerted and continuous effort of education and campaigning to educate the public, politicians, and the media about sound monetary policy by a group of patriotic, liberty-loving individuals. There is a similar effort of education and activism afoot today as well. * The "Necessary and Proper Clause," which is also referred to as the "Elastic Clause," authorizes Congress to "make all Laws which shall be necessary and proper for carrying into Execution the Foregoing powers [listed directly above this clause], and all other powers vested by the Constitution in the government of the United States, or in any Departments or Officer thereof." The Marshall Court ruling was the first step in interpreting this clause to apply not only to the Constitution's enumerated powers but to just about anything Congress deems "necessary and proper." Image by Getty Images via Daylife

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