The Fed and the Debased “Imperial Dollar”:
Timid Economic Growth and
Higher Interest Rates Ahead
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The New American Empire
U.S. (and Global) Economic Woes
Posted, Tuesday, November 9, 2010 5:28 pm
Your article is quite informative and I appreciate your honesty. However, one exception that I have with regard to the Federal Reserve System is that it is not a federal government agency at all. It is entirely a privately owned, for profit entity composed of a consortium of banks (Goldman Sachs, JPM/Chase, Bank of America, NYB Mellon, CitiBank, WellsFargo, etc.) who are independent bankers and unanswerable to the U. S. Government.
Senate majority leader Dick Durbin (D), famously said - on national TV - that: "The big banks own the U. S. Senate"! (Google it). It is well-known that the U. S. Constitution states that the Congress shall issue, regulate and control the nation's money supply. –Not private corporate bankers. The FDIC could do this, with Congress' direction, and lend money - at no interest - to the nation. North Dakota has done this, as a state, since 1919.
Two very recent books that explore this subject are, the excellent "Web of Debt" -(Ellen Hodgson Brown, JD) and "Griftopia" - (Matt Taibbi,"Rolling Stone"). Ellen's book explores exactly how we can become free from the web of debt-based money. See: www.webofdebt.com.
Answer by R.T.:
I am surprised that nobody seems to call for nationalizing the 1913 Fed. You are right that private bankers in the 12 districts and even on the Federal Reserve Board play a central role. The U.S. President, however, nominates the members of Fed Board, and recently, the President acquired the power to nominate the President of the all-powerful New York Federal Reserve Bank.
Bankers carry a lot of influence in Washington D.C. For example, the new financial consumer protection agency could have been placed at the FDIC, but Bernanke and the bankers insisted to have it under their control. They won.
A Short Supply of Honest, Competent Leaders
Posted, Tuesday, November 9, 2010 12:20 pm
Your recent hard-hitting articles stand in contrast to those of when you first started. Good!
The essence of what you are writing is that those who appear to be in charge, at all levels of government, are nefarious and/or incompetent.
Some U.S. commentators have recommended that those living in urban areas should organize their community. This involves the creation of a small non-profit banks, as in North Dakota, and to support local merchants. They appear to abandon the idea that the U.S. as a whole can fix itself. Sounds workable, but any organization demands leaders. We appear to have a short supply of honest, competent and trustworthy people to take charge.
When private companies in Canada (the steel company in Hamilton) want to cut worker pensions, and the U.S government wants to lower Social Security, this does not bode well for the avoidance of civil unrest, or even riots.
There is a Spanish saying, “We are always seven meals away from anarchy”. That is a a serious concern for thinking citizens.
Answer by R.T.:
I think my articles have been quite consistent. If you go on the site of my blog, you can see that this is the case.
I gave an interview recently in the U.S. about the danger of moving away from defined benefit pension plans to purely contributory plans.
In Canada with ideologue Stephen Harper just as in the U.S. with clueless Barack Obama, we face the same problem, i.e. a bad economic model that can ultimately destroy our standard of living. If we can defeat Harper, Canada has a better chance than the U.S. to correct the problem. In the U.S., permanent political gridlock means that nobody is in charge, except the lobbyists and the bankers.
As you say, “this does not bode well”, although I think the U.S. economy is resilient and will not collapse.
An Open Letter to Prof. Dr. R. Tremblay
Posted, Monday, November 8, 2010 12:21 pm
Open letter to prof. Dr. Rodrigue Tremblay
Dear professor emeritus Dr. R. Tremblay,
Thank you very much for your excellent (as always) article “The Fed and the Debased Imperial Dollar.” As usually, perhaps always, you are correct again in your economic and financial analysis and predictions. You said it very simply and made it easy to comprehend.
However, I am a little surprised that neither you nor the majority of erudite professional economists fail to hit the nail on head. I mean, hitting so hard that the nail is completely in the wood and is difficult, if not impossible, to get out.
In other words, to put elementary economic issues into the form of a simple unquestionable equation such as 4+4= 8. That is what today’s economics needs and is not getting. Otherwise, it seems the musings and writings of even the most brilliant men / economists is nothing more than child’s play, building big and perhaps beautiful sand castles on a sunny beach. Nice to see and admire the skills of the builder, but of no practical value.
To be more concrete and open: Why are there no, or only a very few, professional economists who would say: Capitalism is in its final, terminal stage, historically obsolete and is quickly going out of usage. It does not work properly or effectively any longer and it does not serve humankind any more; if it ever did, it did so only to a limited extent. And it will not. Like the previous outdated socio-economic systems of slavery and feudalism, capitalism is now in “bad health”, effectively in a coma and has to be buried with all the honors of a fallen “hero”. The present-day capitalistic socio-economic system hinders humankind’s progress, development, wellbeing, happiness and fairness / justice. It is modern slavery mixed with some elements of feudalism or even worse. There is a permanent global war, officially sanctioned by the true rulers of the world, i.e. the rich, the bankers and other members of the world plutocracy/oligarchy. Only they need wars, because only they benefit from them. The formal “national” governments, the executors of the wars, are solely their obedient servants, whom somebody defined as “psychopathocracy”, masquerading as democracy.
To return to the economic turf: Anybody and everybody with an elementary knowledge of economics knows that the Big Bankers, namely the American FED & co., and other financial sharks, with very generous assistance from the crooked Government or governments, are scooping enormous benefits – profits – wealth through shrewd, albeit primitive and totally immoral, often criminal financial (and other-type) machinations. Trillions of dollars have poured, are still pouring and will pour to the coffers of bankers and other rich, immoral parasites of mankind. Of course, printing or otherwise “issuing” new money (by FED or any other bank) can only create or exacerbate inflation.
We, the somewhat older generation, which cannot remember the Weimar republic’s hyperinflation, still remember the chaos, inflation/hyperinflation and misery in postwar Europe. People in Latin American countries have their own experience. A few people gained, but the majority of people lost terribly. This is what we face today. I was predicting these events and the present economic situation/chaos for decades. Regretfully, my sibyline predictions have come to fruition. Personally, I am not surprised by the state of affairs in the current world. I saw it coming a long time ago. (Although I am not a professional economist, I studied economics and even taught Political Economy some time ago.)
We know that the big World Economic Crisis, the “Great Depression” of the 1930s, effectively never ended. Only was somewhat mitigated, first through the Great War, then changed forms. An informed and wise person knows and honestly admits that the current capitalist system is in crisis, as I pointed above, and needs to be either thoroughly overhauled or, even better, completely replaced. With what? Socialism, of course. Or, rather, Socialism With Human Face as we tried to establish in the sixties in the then Czecho-Slovakia led by a Slovak, Alexander Dubcek. We failed not because of the inherent faults of the projected socialism, but mainly because both the communist Soviet Union (the bloc) and the western capitalist countries (governments, establishment) were mortally afraid of it.
Can you imagine what would have happened if there were a socio-economic system based on principles of peoples’ genuine power, a “government by the people for the people” as well as a national economy run not primarily for profits but for citizen’s wellbeing?
The world community of plutocrats, oligarchs and all the immoral privileged trembled because they knew what we, the people, know. That that would be the end of exploitation and deprivation, “proletarization” of masses and the end of swindles, deceptions, racketeering, undeserved profits, benefits and wealth of the few privileged. Is it an Utopia? Perhaps. But maybe not. What we need today, and will need even more in the near future, is open-mindedness, moral integrity, courage and determination of public opinion influencers, namely also economists, to tell the world the full truth about what’s going on in the present capitalist world and its sick, ineffective and socially harmful economy.
Answer by R.T.:
In my most recent book “The Code for Global Ethics”, I have a whole section about how an efficient economic system should function.
You are well aware of Vladimir I. Lenin's book about capitalism and imperialism: “Imperialism, the Highest State of Capitalism”. The same applies to J. A. Hobson's (1858-1940)1902 book entitled “Imperialism”.
I also appreciate that you raise the issue of 20th Century Germany. In my previous book “The New American Empire”, I drew a clear parallel between the USA today and 20th Century Germany.
I am not a marxist, but the reliance on hegemonic wars by the U.S. to feed its military-industrial complex appears to me to be very dangerous. From my perspective, the U. S. political system is broken. —It is corrupt and in a permanent gridlock. The lobbies write their own laws. Bankers did it under Reagan, Clinton, and Bush, and the result was a most severe financial crisis. That system has not been reformed and is one of the reasons why the U.S. economy languishes.
As for economists, I for one try to call it as I see it. I hope my articles make people think.
The Canadian Dollar
Posted, Sunday, November 7, 2010 9:31 am
I take your point, and share your view about the shakey state of the American dollar however I cannot understand why it is, in these circumstances, that currencies like the Canadian dollar have not long ago broken parr and left the USA dollar in the dust. Is it all down to currency manipulation? If so, as I suspect, who is doing this?
Answer by R.T.:
Indeed, your question is well taken.
The Australian dollar has broken above parity with the U.S. dollar while the Canadian dollar has hit parity to retreat immediately under it. It's true that Australian interest rates are higher than those in Canada. However, there used to be a large spread favoring the Canadian dollar not long ago.
My feeling is that the Bank of Canada, assisted maybe by the large Canadian banks, has a policy of preventing the Canadian dollar from going much above parity. Other speculators may also think that with rising U.S. long-term interest rates, the U.S. dollar is bound to rebound and that this will keep the Canadian dollar from staying too long above the U.S. dollar.
I still think, however, that the Canadian dollar is about to complete its 2007-2010 double top around 1.10 US. This is all contingent on not having a double-dip recession and an absence of trade wars. Since the stalemate at the G-20 meeting in Seoul in mid-November, such fears seem to resurrect.
The Semi-Private Semi-Public Fed
Posted, Sunday, November 7, 2010 11:45 am
What is your interest in maintaining or promoting the myth that the Federal Reserve is a semi-public, semi-private Organization (Dr. Tremblay's statement below)?
"But, for better or worse, the Federal Reserve Board (Fed) seems to be the only branch of the U.S. government left that can still function properly, i.e. that is not caught in a permanent political gridlock. As a consequence, for the time being at least, bankers are in charge of the U.S. economy. Since they are the ones who created many of the current problems, this is not very reassuring. Let's remind ourselves that the Fed is a semi-public, semi-private Organization..."
Is it because the U.S. Government Website or one of its affiliated sites pretends it?
Does that mean it is true? Is it because the 'banksters' subsidized universities such as the London School of Economics, Harvard and...Stanford?
How many economists (or pseudo-economists) have been brainwashed or bought to sell that lie?
There are quantities of books and links to denounce that big lie:
The Creature from Jekyll Island by G. Edward Griffin is one of these books.
Here are a couple of links that explain very well the imposture and the criminal racket of the Fed:
Of course, Mr. Tremblay could say that is coming from social credit nuts (as most supposed competent economist say)…
So, here are other links that are not associated to Louis Even or the Social Credit movement:
There are many more…
Answer by R.T.:
Even though the Fed was designed by J.P. Morgan and half a dozen of bankers in 1913, it was enacted by the U.S. Congress, with the U.S. President naming the Fed Board of Governors and, recently, naming the president of the New York Fed.
It is true that the Fed is not a department of the U.S. government in the way that other departments are. In fact, the Fed is completely independent of any branch of the U.S. government, although it works closely with the Treasury Department. The President and the U.S. Congress have the power to change the statutory authority of the Fed. As a matter of fact, the Federal Reserve Act has been amended two hundred times since its adoption in 1913. —This is the public part.
However, large private banks do own the twelve U.S. banking district so-called “reserve banks” and five bankers rotate on the Fed Board. —This is the private part. Of course, the private part may be stronger than the public part depending on who is in charge of the U.S. government at a given time.
I would propose that, for the 100th anniversary of the Fed in 2013, the Fed be nationalized, as is the case of most central banks around the world. Also, the 1978 Humphrey-Hawkins Act that added a second objective to monetary policy, i.e. smoothing the business cycle, besides the control of inflation, should be reviewed. A semi-private institution should not have the responsibility of managing the entire economy. This is too dangerous.
Really enjoyed your perspective on the Fed actions
Posted, Sunday, November 7, 2010 2:01 pm
Amazed and stunned at the hubris of Ben Bernanke and the world changing disaster his policies are creating. I am also stunned by Bernanke's blinders, the other day in Georgia it took a college student to challenge him on the deflation he is "terrified of", who asked him how his logic squared with the huge run ups in gold and silver. I've been wanting to ask him that question all year.
After scouring the Internet for perspective that made sense or connected the dots, the "debased imperial dollar" article really put things together in a way that makes sense. I'm a long time Chicago based options trader, with a couple partners, and we are onto something huge based off of the "cluesless" (german official called it) nature of Bernanke's dollar destructive policy. For near two months now we have been positioning bearish long bond options, which closed near their highs on Friday.
It's clear to us that the long bond, now without government support or friend to be found in almost two years, is poised for a quick and nasty fall, and we are expecting a near 10% loss in long bonds this week alone, which would increase the value of our positions to produce life changing returns for all of us. Nice article, if you would like to talk sometime about the trading end of things, please let me know.
Answer by R.T.:
One has to remember that the official definition of inflation was changed by the Reagan administration, in 1982. The gold market does know that.
Posted, Saturday, November 6, 2010 3:36 pm
Yes, if we were in a rational environment--what you say might be so. But we are in the matrix--and the matrix [including it's so called financial fundamentals] go the way of the wirepullers [13 trillion$ in "Tarp" bailouts]. See the attached to begin to understand the nature of the dilemma:
I don't think anything is suppose to work--it's a takeover.
Thanks for the heads-up on long term rates--but I still think dollar is headed lower.
Answer by R.T.:
Paradoxically, I think the US dollar is close to an intermediate bottom as longer-term interest rates have begun to climb and other countries' central banks resist the Fed's actions.