Can the Occupy Movement break the grip of the Money Trust?

Many regard Dennis Kucinich as the Ron Paul of the left. The two have shown tremendous respect and solidarity with each other over the years. Now Dennis Kucinich is waking up to what is perhaps Ron Paul’s most defining issue, the fiat economy. Similarly, the Occupy Movement is waking up to what was the central issue to the first wave of the Tea Party, the Federal Reserve System.

It seems like the liberal (for lack of a better term) critique of the Federal Reserve is not that fiat currency is inherently fraudulent, but that it’s being exploited by private interests. They don’t really want to abolish the Federal Reserve, but to nationalize it, which is problematic. Some Occupiers are calling for a “Reserve Bank of America” which would be regulated by “the elected government of the 99%.” Keep in mind that the Federal Reserve Act of 1913 was passed by the “elected government of 99%.”

So, I’d like to offer all my new Occupier friends a brief primer on the Federal Reserve for those new to the party.

My liberal friends have been encouraging me to listen to episodes of NPR explaining why we left the gold standard and why the world still needs dollars, as if a publicly funded radio program could ever offer an unbiased critique of the public funding mechanism. So we’re going tohave to start with the history of the Federal Reserve.

In the early 1900s the American people were very concerned about something they called the, “Money Trust” which was the concentration of financial power in the hands of Wall Street and big banks. Sound familiar? Numerous candidates were elected on the campaign promise to “break the grip of the Money Trust.” One such candidate was Senator Nelson Adrich who was appointed the Chairman of the National Monetary Commission which was formed to address the people’s concerns with monetary reform.

In 1910 Senator Aldrich convened a secret meeting between six of the most powerful financial elites in the world. Historians tell us between these seven men they controlled 25% of the wealth of the entire world. These men had been competitors, at eachother’s throats, but Senator Aldrich brought them together to form a banking cartel. But unlike other cartels the banking cartel also went into partnership with the government. And between the seven of them they drafted the Federal Reserve Act.

Aldrich handed the cartel’s bill over to their cronies in congress, both Republicans and Democrats, and then these same financial elites immediately went to the media and publicly begged congress not to pass the bill, crying that it would ruin the banking industry. Their phony protestations translated into overwhelming support for the legislation from the people, who already despised the big banks. The people were told that the bill would finally “break the grip of the Money Trust” but they didn’t know the bill was written by the Money Trust. The bill passed in 1913 creating the Federal Reserve, and transferring the monopoly privilege to issue money from the US Treasury to those very financial elites. This is not a conspiracy theory. All this information was published in their own memoirs.

Since 1913 the Federal Reserve has gradually and systematically separated the monetary unit from any commodity backing. In 1972 it was completely severed and became a fiat currency, which is a paper (or digital) note that has no intrinsic value. This means that the Federal Reserve can increase the money supply at will, which is the cause of inflation. We experience rising prices not because the real cost of goods increase but because the purchasing power of the dollar decreases. Since 1913 the dollar has lost 97% of it’s purchasing power.

It’s important that my liberal friends understand that the government is complicit in this fraud, because they directly benefit from it. The banking cartel benefits because it allows them to charge interest payments at rates they set on money they create out of thin air. In other words to profit without work. But the government benefits because the Federal Reserve offers them limitless credit to fund their unpopular projects without directly taxing the people. The result is inflation, which is an invisible tax that attacks the poor worst of all. So, for example, we experience the cost of war as a recession instead of a war tax, which obfuscates the root cause of poverty and causes people to blame the businesses which are forced to raise their prices instead of the monetary policy that is eroding our wages. The recession is a war tax.

If walk away with nothing else today remember that. The recession is a war tax taken through inflation.

One of the major problems with this system is that all money is created by the Federal Reserve and then lent to the Government. But there is interest on that loan, which means there is never enough money in existence to actually pay the debt. This means that the collateral on that loan is you, your future earnings, and the future earnings of your children.

If you nationalize the Federal Reserve without abolishing fiat money it resolves the government’s interest payment problem, but it doesn’t resolve the inflation problem which disproportionately hurts the poor because the wealthy don’t store their wealth in dollars. That’s what Wall Street is. That’s why Wall Street is what it is. Because the wealthy put their wealth in commodities to protect themselves from inflation. Fiat money leads to hyper inflation regardless of who has their hand on the printing press. Nationalizing the Federal Reserve would only remove whatever checks still exist on the creation of money.

The Occupy Movement wants to break the grip of the Money Trust, but don’t pretend that placing financial power in the hands of elected officials is any different. I don’t know where this trust of government comes from. Remember the Federal Reserve originally came about when the people asked their elected officials to break the grip of the Money Trust, and look what they gave us. Congress is unlikely to vote against their own limitless credit.

If you want to put the financial power in the hands of the people through their elected governments, why not put the financial power in the hands of the people directly? Why not repeal all legal tender laws that force people to conduct commerce in dollars, and allow everyone to use whatever medium of exchange they like.