Have Central Banks Crossed the Line into Tyranny?

Guest Post by Martin Armstrong

With all the conspiracy theories that somehow the bankers are the real culprits in creating excess money supply, there has been an evolution in central banks that has finally crossed the line since 2019. The Federal Reserve was, once upon a time, responsible. The Fed was originally designed as an authority to create money, which was an elastic money supply. That made perfect sense when the Fed was designed in 1913.

Yes, the bankers owned the shares BECAUSE the Fed was actually designed to do what JP Morgan did in herding the bankers together to save the day during the Panic of 1907. Morgan convinced the bankers that if they did not chip in money to bail out the troubled banks, panic would unfold, and ALL the banks would be hit as a contagion. They listened and joined his effort to stem the Panic of 1907. The design of the Fed was to recreate what JP Morgan put together. The shareholders were the bankers because it was a bail-out fund for the bankers, and TAXPAYER money should not be used to bail out the bankers.

Democrat President Woodrow Wilson signed the 1913 Act, creating the Federal Reserve as well as the income tax. Wilson signed the Revenue Act of 1913, which lowered average tariff rates from 40 percent to 26 percent. It also established a one percent tax on income above $3,000 per year; the tax affected approximately three percent of the population. The Federal Reserve, as designed, was independent, and thus there was the Fed policy v fiscal policy set by Congress.

The elastic money was a brilliant idea where the Fed would buy-in corporate paper to provide lending of the last resort when the bankers could not lend due to the hoarding of cash in a crisis. The corporate paper was typically 90 days. When World War I came, Congress ordered the Fed to buy its paper because they would need to issue a lot of debt. They never returned the Fed to its original design to “stimulate” the economy by directly purchasing corporate paper to prevent companies from laying off employees. Therefore, the structural alteration of the Federal Reserve for World War I transformed the theory of Quantitative Easing into an INDIRECT stimulus rather than DIRECT. When the Fed bought only corporate paper, it directly stimulated the economy. When it was instructed only to buy only government paper, which the government NEVER pays off, any idea of the stimulus was wiped out, for at best, it became INDIRECT.

Then Roosevelt came, and he wanted to control everything. He seized the Federal Reserve and took the power of all the branches, and consolidated it into Washington. Section 203 of the Banking Act of 1935 changed the name of the “Federal Reserve Board” to the “Board of Governors of the Federal Reserve System.” Roosevelt’s Banking Act of 1935 also made major structural changes increasing the number of members of the Board appointed by the president from six to seven to ensure he now controlled the Fed. He created for himself the authority to designate one of the persons appointed as “chairman” of the Board and one as “vice-chairman” of the Board, each to serve in such role for a term of four years.

 

As I have explained in “Manipulating the World Economy,” there was a huge confrontation between the Federal Reserve and the White House. The Fed was directed during World War II to maintain par on US government bonds to fund the war. The Fed was ordered to engaging in what we call Quantitative Easing. Then the Korean War came, and the Fed rebelled. They refused to continue to engage in Quantitative Easing.

The Federal Reserve then stepped in to bail out Long-Term Capital Management in 1998, a failed hedge fund, because if it did not, it would have taken down Goldman Sachs. So instead of allowing that, they bailed out the hedge funds when they really had no authority to do so. That abuse of power led the Fed to then support the bankers who were engaged in manipulating markets to create guaranteed trades.

 

Then the Financial Crisis of 2007-2009 took place when the bankers got AIG to guarantee their dodgy mortgage bank securities. When that all collapsed, the Federal Reserve again bailed out AIG, an insurance company that was operating from London, instead of the US banks. They claimed they did not have the authority to bail out Bear Stearns and Lehman Brothers, which were competitors of Goldman Sachs and investment banks. But they apparently had the authority to bail out an insurance company in London, which again saved Goldman Sachs.

The automated clearinghouse (ACH) system is changing to allow direct deposits from non-banks. On December 23, 2019, the Board approved modifications to the Federal Reserve Banks’ National Settlement Service and Fedwire Funds Service to support enhancements to the same-day ACH service. On September 25, 2020, the Board amended the implementation date for certain modifications. They are preparing for a digital currency, but this means two things. By this expansion, they are planning for the long-term for the elimination of public debt, in which case there will no longer be primary dealer banks, and hence no need to bail out the banks when they blow up on trading, assuming they will still be allowed to trade in the future.

Once the Fed moves to create its own digital currency, it is no longer the independent entity it was once supposed to be.

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25 Comments
Steve
Steve
September 17, 2021 8:40 am

The blood sucking tick (the FED) is bigger than the dog (USA) it’s been sucking blood from for the last 100 years. I know I’m dreaming but exactly why is it we don’t have the Treasury print our money, interest free?
Not many understand how devastating a digital currency will be. It is a death knell for any remaining freedoms we have.
A barter economy will spring up to circumvent a digital money economy but it will be severely limited in scope.
The window is closing on things you might want to purchase before those purchases are rendered “inaccessible” by some govt edict!

Rob
Rob
  Steve
September 17, 2021 9:34 am

We are only months way from the last 8 years commencing:

The Rapture of the Church is after the Tribulation

Ivan
Ivan
  Rob
September 17, 2021 10:43 am

Oh here go the dispies, Darby’s fantasy come true, hold on to you shoes. Watch Damascus!

falconflight
falconflight
  Rob
September 17, 2021 3:23 pm

Not seven years? Bait and switch is a tortious action.

Archeaopteryx Phoenix
Archeaopteryx Phoenix
  Steve
September 17, 2021 11:36 am

Pretty sure that the last world leader who mounted a successful opposition to the Central Banks had his entire nation firebombed in a Hellstorm.

That’s why our Treasury does not print money free of interest.

Four great men opposed the banks – Jesus, Andrew Jackson, Adolf Hitler, and JFK – and look what happened to them.

'Reality' Doug
'Reality' Doug
  Archeaopteryx Phoenix
September 17, 2021 11:50 am

Quite the list of historical figures and a fabrication. Jews were against banking rape long before anyone else caught on, thank Jesus!

Deuteronomy 15:6 (Old JPS):

6 For the LORD thy God will bless thee, as He promised thee; and thou shalt lend unto many nations, but thou shalt not borrow; and thou shalt rule over many nations, but they shall not rule over thee.

Deuteronomy 28:12–13 (Old JPS):

12 The LORD will open unto thee His good treasure the heaven to give rain of thy land in its season, and to bless all the work of thy hand; and thou shalt lend unto many nations, but thou shalt not borrow.

13 And the LORD will make thee the head, and not the tail; and thou shalt be above only, and thou shalt not be beneath; if thou shalt hearken unto the commandments of the LORD thy God, which I command thee this day, to observe and to do them;

Anonymous
Anonymous
  'Reality' Doug
September 17, 2021 6:18 pm

Now do the Talmud.

MrLiberty
MrLiberty
September 17, 2021 8:48 am

Central banking is founded on tyranny. How could it be any other way?

Anonymous
Anonymous
  MrLiberty
September 17, 2021 10:22 pm

If Jews weren’t involved.

Anonymous
Anonymous
September 17, 2021 9:09 am

FDR…second worst president.
Abraham Lincoln…first place.
Been going downhill since Ronnie.

'Reality' Doug
'Reality' Doug
  Anonymous
September 17, 2021 12:13 pm

Under Ronnie:
1. Wall Street continued to buy up local hospitals for incorporation.
2. 1986 Amnesty law.
3. Saving and Loan Bubble.
4. Beirut Bombing 1983.
5. Happy Military Industrial Complex.

Scott MacLoed, “Key Marine sentry says gun was unloaded when Beirut bomb truck came”:

BEIRUT, Lebanon, Oct. 27, 1983 (UPI) – A key sentry during the bomb attack that killed 221 U.S. servicemen had no magazine in his rifle when a truck loaded with explosives barreled into the Marine headquarters, a Marine officer said today.

Col. Tim Geraghty, commander of the Marines in Beirut, said two days before the attack they had been warned that a car bombing was imminent. Asked if there was any culpability on the part of sentries, Geraghty, replied, ”No.”

“Rules of Engagement and Non-Lethal Weapons: A Deadly Combination?”, CSC 1997:

The Marines entered a country about the size of Connecticut that contained three million people, 17 officially recognized religious sects, two foreign armies of occupation, three other national contingents of peacekeeping forces besides themselves, and some two dozen extralegal militias. Over 10,000 people had been killed during the preceding eight years. Lebanon was a country where criminals involved in indiscriminate killing and every other type of conceivable illicite activity, issue political manifestos and hold press conferences. The Marines found themselves in a lawless quagmire where there is no shortage of endemic surrogates willing to carry out hostile acts against the U.S..[39]

To couple this extreme environment with the anarchy of an unsupported government and the high anxiety following the assassination and massacre and call it peacekeeping is stretching the limits of that definition.[40] The Marines were not going into a benign environment at the request of all parties involved and there was no peace to keep. A more accurate and appropriate definition of the Marines’ mission would have been that of peace enforcement.[41] The difference in mission definition is significant because peace enforcement missions have a much more robust set of ROE than does the primarily defensive mission of peacekeeping. Nonetheless, the Marines were interposed between the IDF and the populated areas of Beirut as peacekeepers and directed to take up positions at the Beirut International Airport (BIA). The JCS instructions to the U.S. European Command (USEUCOM) explicitly stated that the U.S. forces would not engage in “combat.” It went on to say that, in accordance with USEUCOM PROE, the U.S. forces were directed to exercise restraint and to use force only in self-defense so not to escalate any conflict, endanger innocent lives, or to become enmeshed in factional infighting.[42] In essence, the military mission of the Marines in Beirut boiled down to a symbolic “presence.”[43] Mandate compliance was assured by USEUCOM issuing highly restrictive ROE.[44]

Thus, the United States Marines embarked on a mission in which the ROE forbade the use of force unless a hostile act was committed. These ROE contained language such as::

When on the post, mobile or foot patrol, keep loaded magazine in weapon, bolt closed, weapon on safe, no round in the chamber.

Do not chamber a round unless told to do so by a commissioned officer unless you must act in immediate self-defense where deadly force is authorized.[45]

The restrictive language of the ROE led the Marines to believe that they had to take the first hit before force was authorized. These restrictive ROE, started on 28 September 1982 and remained in effect for three MAUs (32d, 24th, and 22d) that deployed to Lebanon.[46] This set of ROE became known as the “White Card ROE” because of the white paper used in making the ROE pocket cards.[47]

As pointed out earlier, the Marines erroneously assumed they were going into a permissive, or at least benign, environment. This error soon became apparent as the situation visibly changed in front of the Marine’s eyes. Between October of 1982 and February 1983, many previously absent young men began reappearing in Beirut — it was assumed that they were members of the Syrian and PLO forces that had been evacuated just the preceding month. The Marine presence went from tacit acceptance to “hard” stares, taunts, verbal (slang) assaults, the appearance of Khomeni posters everywhere, and rock throwing incidents.[48] Since no response was authorized, the marvelous restraint shown by the Marines was interpreted as a lack of resolve by the factional elements which encouraged them to up the ante.

Ask not for whom the Voltaire quote was directed, for it was directed to thee.

Still not getting it!

Description of youtube video:

My imagined version.

According to Roger Waters, Barrett came into what was to be THE Pink Floyd’s last practice session with a new song he had dubbed “Have You Got It Yet?”. The song seemed simple enough when he first presented it to his bandmates, but it soon became impossibly difficult to learn and they eventually realized that while they were practising it, Barrett kept changing the arrangement. He would then play it again, with the arbitrary changes, and sing “Have you got it yet?”. Eventually they realized they never would and that they were simply bearing the brunt of Barrett’s idiosyncratic sense of humour

falconflight
falconflight
  Anonymous
September 17, 2021 3:27 pm

Bonkers! LBJ not in that list? Besides Abe paid the price.

i forget
i forget
September 17, 2021 9:18 am

“That made perfect sense when the Fed was designed in 1913.”

Perforated sense, maybe? I knew a guy got a perforated eardrum. First a lot of pain, later, silence.

In restless dreams I walked alone
Narrow streets of cobblestone
‘Neath the halo of a streetlamp
I turned my collar to the cold and damp
When my eyes were stabbed by the flash of a neon light
That split the night
And touched the sound of silence

LJB
LJB
September 17, 2021 10:10 am

Does anyone know if Stripe or Square are going to be ratting their clients out to the IRS like PayPal is now?

'Reality' Doug
'Reality' Doug
September 17, 2021 11:42 am

The Federal Reserve was, once upon a time, responsible.

Are you fucking kidding me.

Next thing your gonna tell me is that kosher Jim Kunstler is a conservative on our side. He sure gets traction.

BL
BL
September 17, 2021 12:26 pm

Does the Pope shit in the woods? The central banksters don’t care if they wreck your life, starve entire regions, inflict major despair. The elites need their vast fortunes to enjoy their lives. Sheesh……

'Reality' Doug
'Reality' Doug
  BL
September 17, 2021 12:38 pm

Worse still, they do care if they don’t. They keep caring. Don’t tell After-the-Fact Warrior.

ursel doran
ursel doran
September 17, 2021 3:23 pm

Demented Idiot Moron and pals massive Ignorance and Stupidity reviewed.
OK, it is one thing to pander to the ignorant children saying on camera, “we are going to eliminate fossil fuels”, and actually take steps to hurt the the middle and bottom tier of the population that have to drive to their jobs to make money to pay for groceries and taxes with the costs accelerating like never before.
Next November the hammer falls, hopefully.
https://www.zerohedge.com/markets/democrat-insanity-peaks-biden-shutters-pipelines-then-baffled-when-gas-prices-rise

falconflight
falconflight
September 17, 2021 3:26 pm

This issue as a priority has considerably lower considering that Doctors/Nurses/Researchers are lying and conniving, killing and enriching, as they harvest the commodity called humanity.

Leethal
Leethal
September 17, 2021 4:06 pm

Congogress (or the commies) violated the Constitution when they created the Feral (of all names) Reserve. Only CONGOGRESS can coin money or tax it.

Not the Feral (of all names) Reserve nor the IRS (Internal Robbery Service). They cannot delegate their duties to private institutions. Can you imagine if they delegated their duties to a private corporation called Congogress Corparation of Amewicka and hid behind dat?

We would be up in arms but somehow when it comes to collecting and making FAKE money, it’s uh, OK. After all, it’s just money. Phew……

This is a GROSS violation of their duties not to mention treason but nobody bothered to NFARCE the law and hang them so here we are with worthless change.

Donald
Donald
September 17, 2021 5:06 pm

The Federal Reserve bank is a private bank and not part United States Federal government. It is not a central bank like Communi

Donald
Donald
September 17, 2021 5:09 pm

The Federal Reserve bank is not a central bank like communist Russia and China.a book called the creature from Jekyll island by Griffin goes into more detail.

Anonymous
Anonymous
  Donald
September 17, 2021 6:22 pm

the creature from Jekyll island – the actual book – is what you want to read

https://archive.org/details/pdfy–Pori1NL6fKm2SnY

DeaconBenjamin
DeaconBenjamin
September 18, 2021 3:48 pm

So how was the Fed’s bailout of Continental Illinois in the 80s any better than the bailout of LTCM? Perhaps because it was conducted by St. Volcker.