|
Famed Expert on Fed Reveals Looming Crisis
By Victor Thorn
The Federal Reserve has “administered a lethal dose to this country.” These ominous words originated from G. Edward Griffin, author of The Creature from Jekyll Island, during a Nov. 4 interview with this writer. He also opined, “The amount of money they’ve created out of thin air is so large that we can’t recover.”
AMERICAN FREE PRESS, and its predecessor The Spotlight, have been exposing the Fed as a criminal enterprise for decades.
Most recently in an Oct. 18 front-page article, AFP described how Barack Obama’s $700 billion TARP program was “only one small part of the trillions of dollars’ worth of backdoor bailouts, asset guarantees, low-interest- rate loans, free money and other benefits handed out to the Money Trust.”
AFP reported that the true cost of this economic insanity nearly equals our entire gross domestic product. In an attempt to make sense of this increasingly chaotic situation, AFP continued the call for the Fed to open its books to taxpayers instead of, as AFP noted, “stonewalling the release of all details to the public.”
Griffin put this matter into perspective: “Even if all government spending was stopped and every federal agency closed down, the future debts that we’re responsible for are too enormous to cover.”
He offered this revelation in response to the neglected concept of unfunded mandates. In basic terms, U.S. future commitments to Social Security, Medicare, and pensions for public employees is estimated to reach $120 trillion in the future.
Essentially, if America completely defaulted on all debts to the Federal Reserve, along with China and Japan, it would still be a pittance compared to what we “owe our own citizens,” as Griffin sees it.
As short-term compensation for this out-of-control spending, the Fed has unveiled a second round of “quantitative easing,” or “QE2,” more commonly known as a “stimulus package,” by dumping $600 billion into the economy. Federal Reserve officials have chosen what some see as the most lethal step imaginable by monetizing our debt. This notion refers to central bankers financing U.S. expenditures by flooding the market with additional devalued paper.
 |
According to Griffin, “Fed policies are undermining the entire economy by producing new money out of thin air. We’re doomed to failure because foreign countries are already buying less of our debt. Plus, they’ll also reach a point where the U.S. dollar won’t be recognized as the world’s reserve currency.”
Federal Reserve President Ben Bernanke blatantly broke a promise made on June 3, 2009 where he vowed not to engage in this type of self-defeating practice. “The Federal Reserve will not monetize the debt,” he said. “Either cuts in spending or increases in taxes will be necessary to stabilize our fiscal situation.”
Criticism of Bernanke has been swift and widespread. Stephen Stanley of Pierpont Securities lamented the latest “shadow stimulus,” saying: “This will quite possibly be the worst mistake by the Fed in a generation.”
Prominent economist Nouriel Roubini observed unequivocally: “When governments reach the point where they are borrowing to pay the interest on their borrowing, they are coming dangerously close to running a sovereign Ponzi scheme.”
Internally, even rank-and-file members of the banking elite say they are outraged. Thomas Hoenig of the Kansas City Federal Reserve referred to quantitative easing as “a pact with the devil.”
However, Bernanke appears oblivious for two primary reasons: One, he isn’t worried about being reelected by voters because the Fed is a privately owned corporation, and secondly, he doesn’t need congressional
approval to print more money that isn’t collateralized by anything.
Unfortunately, his latest “Hail Mary” reflects a limited amount of alternative options. With prime interest rates near zero since December 2008, it’s only a matter of time until Weimar-style policies will unleash an increase in prices, possibly leading to hyperinflation, as the thinking goes.
Echoing global condemnation of the Fed, even China’s central bank adviser Xia Bin chimed in on Nov. 4: “As long as the world exercises no restraint in issuing global currencies such as the dollar, then the occurrence
of another crisis is inevitable.”
Of course, China is on the hot seat, because it holds so much U.S. debt, and an inflated U.S. dollar means debt it holds will be worth less than the money it originally loaned.
Brazil’s president-elect Dilma Rousseff rang an even more urgent alarm in regard to devaluing the dollar and starting a currency war: “The last time there was a series of competitive devaluations, it ended in World War II.”
His colleague, Brazil’s Finance Minister Guido Mantega, warned, “Everybody wants the U.S. economy to recover, but it does no good at all to just throw dollars from a helicopter.”
The dirtiest secret of all is that Barack Obama’s original $878 billion stimulus package was never intended to create shovel-ready jobs. Instead, it was merely used to keep the government afloat so that local and state employees such as teachers, policemen and trash haulers wouldn’t be laid off. But their wages are negligible compared to the trillions owed for unfunded mandates.
Most tragically, even if the government taxed 100 percent of the earnings of every worker and corporation for an entire decade, it still couldn’t generate enough money to cover our mountain of future debts.
However, other sources AFP has quoted in recent years maintain that the U.S.—if it converted away from the Fed’s debt-based money creation—could restructure some future mandates and handle them anew, under a system free of the Fed.
Subscribe to American Free Press. Online subscriptions: One year of weekly editions—$15 plus you get a BONUS ELECTRONIC BOOK - HIGH PRIESTS OF WAR - By Michael Piper.
Print subscriptions: 52 issues crammed into 47 weeks of the year plus six free issues of Whole Body Health: $59 Order on this website or call toll free 1-888-699-NEWS .
Sign up for our free e-newsletter here - get a free gift just for signing up!
(Issue # 47, November 22, 2010)
|
|
