The Federal Reserve - Christmas Scrooge

The Federal Reserve - Christmas Scrooge

Tis the season to be jolly; or is it really? You might not think so when you learn (not how much all those credit card purchases are going to cost you in the long run, but) how through the use of such loans, the Fed is sucking the life-blood out of our and our children’s economic future.

There are zillions of books and articles out there which purport to explain how bad the Federal Reserve ("Fed") really is but, for the most part, none of them really explain anything in a manner which the average credit consumer can really understand.

Because how the Fed actually affects us in our day to day lives is fairly simple and can be explained in a relatively few paragraphs (or pages) the authors of this proliferation of writings have had to go back and write chapter after chapter setting forth hundreds of years’ history explaining the manipulation of gold by ancient money-changers in order for the authors to make up enough material to fill a book, which is part of why I have set forth as much as I have up to this point. If I had just started writing about how the Fed works, up at line one, I would be well into it by now so on that note I guess I better get to it:

As to previous writings of others explaining the Fed; it is quite true that the Fed is a private corporation and that it has no reserves (as least no gold and silver reserves backing its notes) and that the list of its private stock-holders is secret and that private ownership is part of why the Fed is the Christmas Scrooge and it is also true that the paper notes we use as money (Federal Reserve Notes or "FRNs") are created by the Fed by merely writing checks. (Most authors writing about the Fed insist that the Fed creates FRNs out of thin air and that these FRNs have no value or backing but I contend otherwise - at least partially). Most authors also contend that the Fed manipulates the money (FRN) supply with malicious intent in order to enrich the private stock holders of the Fed. Although it is true that the Fed does indeed manipulate the FRN supply I contend that the purpose is otherwise than just malicious. Some other authors also contend that the interest charged by the Fed (for all realistic purposes the "Fed" includes all banks in the United States but does not include credit unions or similar secondary financial institutions) is a form of taxation but I disagree totally with this claim. Taxation is mandatory - borrowing from the Fed at interest is a voluntary act.

How does the Fed work and affect us in our day to day monetary transactions?:
Without going into tedious rather irrelevant detail, prior to the Fed and its FRNs we used various forms of United States’ notes which were backed by gold or silver. When the Fed started issuing FRNs the FRNs looked very similar to United States’ Notes and for many years both types of notes circulated in the economy at the same time on an equal value basis. Over the years the gold and silver backed US Notes were removed from circulation (along with their gold and silver backing) and all we now have is FRNs, unbacked by gold or silver.

Virtually all FRNs in circulation get into circulation as the principal of some borrower’s loan. There is no significant exception to this - loan principal is the original means by which all FRNs get into circulation (more on this below). Those who borrow FRNs from the Fed are comprised of two categories; (1) some FRNs are borrowed (created) to fund government expenditures and (2) some are borrowed (created) to fund private sector monetary needs.

Those FRNs created to fund private sector monetary needs are backed by the promise of the borrower to repay - this is a valid promise and FRNs created for such private borrowers have actual value. I contend that such FRNs are not FIAT money. On the other hand, those FRNs created to fund government loans are purportedly backed by future taxation of the population but this is an empty promise for two reasons (1) the debt is so enormous that the taxpayers of the US have no capability of ever repaying it and (2) even if they did have unlimited productive capability the effect of what I call the "Single Source Doctrine" makes such repayment mathematically impossible, therefore I contend that FRNs created by the Fed to fund government expenditures are truly FIAT money.

The single source doctrine is axiomatic (self-evident). Yadu’s Single Source Doctrine: "When any item has only one single source then the issuer of that item cannot ever receive back more of that item than the single source issued"; i.e.., as General Motors is the single source of all Chevrolets; GM could never recall and receive back more Chevrolets than were manufactured in all of GM’s many factories. It makes no difference how many millions of Chevrolets were manufactured - GM could not ever get back even one more Chevrolet than were manufactured in all of the GM factories.

Likewise, as the Fed is the single source of each and every single FRN on the planet Earth, the Fed cannot ever get back even one more FRN than the total of all the FRNs the Fed creates as the principal to fund all of the loans the Fed ever made/makes to all of the Fed’s various borrowers; that is, I contend that it is absolutely a mathematical impossibility for the Fed (or any of its member banks) to have ever made even one FRN of interest profit on any of its (their) loans - all of the Fed’s trillions of "profits" have not been through the collection of interest but rather are through the sale of foreclosed-on assets pledged by borrowers to secure their loans.

How does this affect us in our day to day lives? We are all familiar with the child’s game of musical chairs; as long as the music is playing all of the children are walking around participating on an equal basis and none of them "believe" they are "in trouble". The larger the number of children and the more unfamiliar they are with how the game works the happier they will appear as the game begins and is ongoing. If the group is large enough many children will not even realize that some of the players "lost" every time the music stopped. This is especially true if the children are not informed (or do not understand) that there is one less chair than children and that one chair will be removed every time the music resumes. As those "in the know" realize, each time the music stops all of the children, but one, will easily find a chair and sit down, but there will always be one child who will not be able to find a chair.

The Fed works in much the same way:
As long as there are plenty of qualified borrowers participating on an equal basis all of the borrowers will believe that they will all be able to repay their loans. The larger the number of borrowers and the more unfamiliar they are with the inevitability of the Single Source Doctrine, the happier they will appear as they unwittingly mortgage away their future, and if the group of borrowers is large enough the vast majority of them will not realize that some of the borrowers must be foreclosed upon (mandatory and unavoidable due to the inevitability of the Single Source Doctrine) every time the money supply inevitably becomes short. This is especially true if the borrowers are not informed that the available supply of FRNs in circulation was never ever large enough for all borrowers to repay both their loan principal plus the interest thereon (Single Source Doctrine again) and that as the circulating FRN supply is reduced by the monthly payments (plus interest) the supply of FRNs is reduced below the number required for all of the borrowers to repay all of their loan obligations.

That is why usury (lending at interest) is forbidden by God – JAH.

At the beginning of an economic boom cycle all of the borrowers will find it fairly easy to make their monthly loan payments but as the months and years go by there will always be more and more borrowers who will not be able to obtain sufficient FRNs to make their monthly payments - very appropriately we call this "foreclosure" cycle the "bust" cycle. I call this "Musical Mortgages".

That, in a nut shell, is how the Fed affects us in our day to day lives. I don’t know how it will come up on your computer screen but in my word processor it took about two pages. I will now continue by explaining how and why the Fed manipulates the money supply but the following is really only the nuts and bolts of the mechanics of how the Fed keeps its scam from falling apart.

How does the Single Source Doctrine impact the economy?
Take one mortgage loan as an example; a borrower wants to buy a home priced at $100K. He borrows the $100K from the Fed and signs a mortgage note pledging the home as security and therein promises to make payments of $833.00 for 30 years - total obligation - 12x30x$833=$300K total repayment obligation. Remember that the Fed originally only created $100K to fund the loan - that is - the borrower only borrowed $100K - where does the additional $200K come from to pay the interest on the loan? If there were only one borrower and only one loan then this scam would never work but there are literally millions of borrowers and each and every borrower’s $100K loan has its own $200K interest surcharge added to it. All of these millions of loans are made on different days during the year during the years of the boom cycle. Each of these millions of borrowers promised to repay $200K more than was created to fund their loans. If there were just one million borrowers times $100K per borrower, the Fed would have actually created one hundred billion (with a "B") new FRNs but the borrowers would, all together, have promised to repay three times that amount or three hundred billion FRNs.

There is no realistic source for all of the needed additional two hundred billion - not even with Greenspan’s phony loans to insolvent Third World Nations. During the boom cycle the borrowers and everyone participating in the economy would have access to the total one hundred billion FRNs created to fund all of the loans and everyone in the economy and the borrowers would all use all of the borrowers’ circulating loan principal to make the interest payments on their individual loans. If all borrowers were economically equal then the Single Source Doctrine would inevitably require 2 out of 3 borrowers to go into foreclosure.

Greenspan’s phony loans to Third World Nations does indeed work to save many of these domestic borrowers from foreclosure, But not all - I mean, after all - the Fed does need to make a few (thousand) foreclosures - how else could it take its unjustified profits?

As the number of loans increase during the boom cycle the number of remaining qualified borrowers is correspondingly gradually diminished and the number of loans being made gradually subsides. This natural market-driven reduction of loans being made causes the influx of additional FRNs into the economy to naturally level off and then to decline and the boom cycle quite naturally begins to subside and the beginning of a bust cycle is inevitable if some other source of FRNs is not found (like Greenspan’s mega billion loans to Third World Nations - which are expected to default before the loans were even made - in fact, it is my studied opinion that the loans were made precisely to reap those expected defaults - thus infusing additional FRNs into the world wide economy).

The Fed’s reduction of new domestic loans (due to fewer qualified borrowers) to provide additional FRNs into the economy is perceived by other writers as a malicious reduction of the money supply by the Fed. Although it is true that the Fed will deny loans to fully qualified borrowers during an economic down cycle these denials are only temporary and are not malicious but are more akin to a farmer setting aside a certain quantity of his crop as seed for future crops. The Fed denies loans to qualified borrowers near the end of a boom cycle (these denials are often regionally economically based) because the Fed understands the Single Source Doctrine and the Fed knows that when the boom peeks, levels out and starts to decline that those few remaining qualified borrowers will be needed to lead the way into the next boom cycle, but before that next boom cycle can happen there must be a shaking out of those previous boom cycle borrowers who will be unable to make their loan payments - musical mortgages.

At the beginning of a boom cycle there are many many thousands of qualified borrowers (a qualified borrower is a borrower whose income (and credit record) is more than sufficient to indicate that the borrower will be able to make the payments on the proposed loan), and the Fed generally approves all loan applications. This increases the circulating supply of money by billions of FRNs and the economy booms - for a while.

How does the Fed make a profit on home mortgages? The Fed facilitates transactions between home builders who have homes for sale at $100K each and want-to-be home owners who do not have sufficient cash to purchase the homes outright and seek loans. Provided the borrowers are qualified, the borrowers sign mortgage contracts and the Fed makes out checks for $100K to the home builders. Due to the inevitability of the Single Source Doctrine, some of the home purchasers will default on their loans. Upon their defaults the Fed (through its local banks) forecloses and takes the homes from the defaulting borrowers and offers them for sale at a sheriff’s auction where, most usually, the Fed’s representative are the only bidders. The Fed’s representatives bid on the homes are no more than the remaining unpaid principal balances which serves to zero out the borrowers’ obligations to the lenders. The lenders now own the homes for which they paid not one dime, having created the original $100K which they "paid" to the builders by merely writing checks. Thereafter the lender offers the homes for sale and sells them to the next batch of borrowers and the cycle starts all over again, except this time the "lenders" do not have to make checks to the builders as the builders were paid out of the loop when the builders received the $100K checks when the homes were first sold to the first buyers. When the second (and subsequent) buyer defaults the lenders will do the same thing all over again and every time thereafter all of the money the lenders "make" is 100% profit - that is - if the take in such transactions can properly be designated as "profit"?

Is there a better way - you bet there is!! And what I have in mind would possibly enable the total elimination of all taxation. More on that in a later issue.


Yadu Alipuria

The ONLY solution is to enforce The Plan against the N.W.O. Banksters and reinstate God’s Law:-