This Is the Way the Fed Ends, Not with a Bang but a Whimper

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Op-Ed

By Paul Dowling

 

“Gentlemen! . . .  I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.  When you won, you divided the profits amongst you, and when you lost you charged it to the bank.  You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families.  That may be true, gentlemen, but that is your sin!  Should I let you go on, you will ruin fifty thousand families, and that would be my sin!  You are a den of vipers and thieves.  I have determined to rout you out, and by the Eternal [here Jackson brings his fist down on the table], I will rout you out!”  – President Andrew Jackson, upon vetoing the charter renewal for the Second Bank of the United States, the corrupt central bank of Jackson’s day

 

The Creation of Perpetual, Unrepayable Debt: Why the Fed in Its Current Form Must Go

The Federal Reserve, the private banking cartel that controls US monetary policy, can print money that is backed by nothing of value at all and that takes very little work to create; then the Fed transfers this currency into the coffers of the US government in exchange for Treasury bills (marketable securities), which the Fed keeps as collateral until such time as the currency might be repaid with interest.  Any currency created to repay that debt, however, will come from the Fed with its own interest attached, and to repay that interest, more interest-bearing currency will be created, and so forth, instituting a veritable Ponzi scheme which renders impossible any future reconciliation of the national debt.

 

Besides instituting a self-perpetuating system of debt creation with no hope of repayment, the loans the Fed gives to the US government are not even genuine transfers of wealth, but merely represent numbers written down in the Fed’s books as a debt owed in exchange for printing a fiat paper currency or for creating electronic money, all of which possesses no intrinsic value other than the paper on which it is printed or the thin air out of which it is summoned.  This creation of money issued as debt to its users succeeds only in making rich bankers (for their having done nothing more than creating currency) and indebted citizens (due to their government’s acceptance of paper debt notes that are not backed by the value of any actual commodity).

 

Bankers can print billions of dollars – indeed, trillions of dollars, depending on how much debt they wish to create – in almost no time, especially in an age when currency can be created by a computer, at lightning speed.  Is this currency creation that is being performed really worth billions of dollars in labor costs?  (Hourly wages could be paid for this currency creation, costing the government relatively little, if the money were being created by a government worker.)  The Federal Reserve’s modus operandi is nothing short of a swindle made legal, in 1913, by President Wilson’s signing the Federal Reserve Act into law.

 

The financial fraud perpetrated by these bankers is exacerbated by the fact that the central bank cartel continues to inflate – and thereby devalue – US currency, creating more debt in the process; and, because the Fed – as an “independent, privately owned and locally controlled” corporation – is not subject to audit by the government’s inspectors-general, it cannot be known to the American public who receives every dollar of currency fabricated.  Thus, inherent opportunities for corruption arise for the benefit of the Fed’s camarilla of cartels, but, as long as the Fed’s dark money transactions are not officially reported, no probable cause can be established for Congress to pass a bill to audit, or otherwise investigate, the Fed.

 

Analyst Nomi Prins confirms the Fed’s ability to send money, for its own opaque purposes, to parts unknown: “The ‘dark money’ comes from central banks.  In essence, central banks ‘print’ money or electronically fabricate money by buying bonds or stocks.  They use other tools like adjusting interest rate policy and currency agreements with other central banks to pump liquidity into the financial system.  That dark money goes to the biggest private banks and financial institutions first.  From there, it spreads out in seemingly infinite directions affecting different financial assets in different ways.  Yet these dark money flows stretch around the world according to a pattern of power, influence and, of course, wealth for select groups.  To be a part of the dark money elite means to have control over many.”

 

There has been little hope during the last hundred years that the Fed’s issuance of unregulated dark money and unbridled debt enslavement could ever be halted – until the election to the presidency of Donald Trump, an outsider who is not a member of the corrupt establishment.  President Trump’s stated goal has been to bring the central bank to heel, so it serves the purposes of free Americans, rather than the goals of a globalist cartel with a socialist agenda (the aim of which is to concentrate most wealth in the hands of a few elites).  Trump’s America-first plan, with regard to the central banking system, has now begun to come into sharper focus, and, indeed, it represents the sum of all fears held by the elites.

 

Finding Opportunity in Crisis, Trump Turns the Tide in His War on the Fed

After declaring a national emergency, due to the CoViD-19 pandemic, per executive order, President Trump has invoked the Defense Production Act, which allows him to issue production orders to private corporations.  The economic crisis brought on by CoViD-19 poses a unique dilemma for President Trump; however, the president will utilize his presidential powers under the current state of emergency to turn the tide in his Jackson-inspired bank war against the Fed.  However,  even though the Federal Reserve is a private entity, Trump has not invoked the Defense Production Act with respect to the Fed, choosing instead to take a different line of attack to bring an end to the Fed’s unrelenting issuance of debt.

 

Trump’s real genius in how he is defeating the Fed is in his implementation of an operating system – to bail out the American people – that requires the Fed to reverse its order of operations by following the Treasury’s lead; this forces the Fed to play second fiddle to Treasury, following Treasury’s orders, going forward, which gives Trump the ultimate say-so in the Fed’s daily operational decisions.  Trump will use this opportunity to make decisions about how the Fed should operate that are far-reaching in their consequences, eventually guiding the Fed along the path to its own absorption into the clockwork of the Treasury for good.

 

Because a tanking stock market has put at risk the people’s Individual Retirement Accounts, as well as other various pension funds, a clutch rescue of the market, was in order.  The volatility unleashed by the Chinese Virus needed to be stabilized, to help retirees who were relying upon the investments in their retirement accounts.  Unlike the corporatism of Obama’s bail-outs – when only establishment-controlled big businesses and large banks benefited – Trump’s interventions have helped everyone, from private citizens to small businesses, to major corporations.  Trump’s rescue reverses the use of the Fed’s own financial weaponry, diminishing the globalist Fed’s role while enlarging the national Treasury’s.

 

The Mechanics of Trump’s Plan to Rout the Fed

The Fed has announced “unlimited quantitative easing,” including $625 billion in bond buying per week, in the fight to overcome the CoViD-19 economic crisis.  (This amounts to $2.5 trillion a month.)  To this end, Trump, through his Treasury secretary, has instituted an “alphabet soup” of programs.  A list of these follows: the CPFF (Commercial Paper Funding Facility) which purchases commercial paper from the issuer; the PMCCF (Primary Market Corporate Credit Facility) which buys corporate bonds from the bond issuer; the TALF (Term Asset-Backed Securities Loan Facility) which provides a funding backstop for asset-backed securities; the SMCCF (Secondary Market Corporate Credit Facility) which acquires corporate bonds and bond ETFs in the secondary market; the MSBLP (Main Street Business Lending Program) which is being organized to help eligible small and medium-sized businesses, in parallel to the efforts being made by the Small Business Association.  These “Special Purpose Vehicles” exist to permit the infusion of stabilizing liquidity into the markets, under the direction of Trump’s Treasury Department.

 

Each Special Purpose Vehicle (or SPV) is constituted differently, based upon its special role.  In collaboration with the Fed, the Treasury will employ the Exchange Stabilization Fund, an emergency reserve account the Treasury uses to temper instability in various financial sectors, such as credit, securities, and foreign-exchange markets.  These SPV accounts are constituted in dollars, foreign currencies, or special drawing rights – whatever might prove most appropriate for adding liquidity.  The ESF allows the Treasury to stage interventions without the approval of Congress, and by the Treasury’s taking the initiative in providing the needed equity investments into each of the SPVs, the Treasury claims the first-loss position on behalf of the government, so Treasury becomes the entity charged with backstopping the loans.  The Fed, playing banker, has hired BlackRock to acquire the securities and manage the SPVs on the Treasury’s behalf.  This operational structure places the Fed in the role of servant to the Treasury, even as it infuses the Treasury with currency (in exchange for marketable Treasury notes).  Thus, the Fed is buying up America’s debt, slowly but surely, while issuing the money the Treasury needs to buttress the economy.

 

This is how companies receive liquidity guarantees for the duration of the economic crisis.  According to the Treasury’s operational design, while the SPVs are busy buying private-sector assets, such as stocks in companies whose stock prices need buoying to protect the values of Individual Retirement Accounts, the Fed will continue to buy Treasury notes.  As this process continues, the Fed will swallow – at the rate of $2.5 trillion per month – not only the new debt being generated by the bail-outs but all of the older debt hitherto issued by the Fed to the US government.

 

The Fed, acting as the Treasury’s banker – during the seven months of April through October of 2020 – will perform $17.5 trillion of debt buy-back, which is roughly equivalent to America’s marketable debt, as of February 2020.  The remainder of the US debt currently owed is non-marketable (interest) debt – interest created by the Fed.  This is nothing less than the delivery of justice, for, as the Fed once issued all of this debt in the form of fiat Federal Reserve notes, the US shall simply issue that same debt back to the Fed in the form of fiat Treasury notes.  At the end of this process, the American people will be free and clear of any debt or interest owed to the Fed, having made a legal trade in doing so – Federal Reserve notes in exchange for US Treasury notes.

 

Chairman of Fed, Donald J. Trump

To follow financial analyst Jim Bianco’s line of reasoning, “the federal government is nationalizing large swaths of the financial markets.  The Fed is providing the money to do it.  BlackRock will be doing the trades.  This scheme essentially merges the Fed and Treasury into one organization.  So, meet your new Fed chairman, Donald J. Trump. . . .  This means that, in the extreme, the administration would be free to use its control, not the Fed’s control, of these SPVs to instruct the Fed to print more money so it could buy securities and hand out loans in an effort to ramp financial markets higher going into the election.”  But would it really be so bad, if the markets moved higher, restoring Americans’ wealth that was lost during the CoViD-19 crisis?  And is it actually unfair to restore America’s booming economy as closely as possible to the healthy status it enjoyed prior to the pandemic?  The real importance of this integration of the Fed into the Treasury is that the people’s elected government is now in the driver’s seat when it comes to money matters.  It is an elected Chief Executive – rather than an unelected cabal of establishment elites – who now manages the nation’s economic growth, bringing America’s money management back in line with the US Constitution and the rule of law.

 

Tyler Durden, of ZeroHedge, has shared this observation: “After three years in power, Trump has finally fulfilled his electoral promise of taking private banks out of the US public affairs, ending a century of exploitation of the American citizens.  He has put the infamous Blackrock investment group to start buying important corporations for the Fed, meaning that he’s nationalizing chunks of the economy while avoiding the crash of the market by implicating important private investors in the deal.”

 

President Trump’s rescue strategy for the economy follows the philosophical principles laid out in his February 3, 2017, Presidential Executive Order on Core Principles for Regulating the United States Financial System, which includes the following stipulations: 1) “empower Americans to make independent financial decisions and informed choices in the marketplace, save for retirement, and build individual wealth”; 2) “prevent taxpayer-funded bailouts” [and, indeed, it is the Fed, not the people, bailing out the economy this go-round]; 3) “foster economic growth and vibrant financial markets”; 4) “enable American companies to be competitive with foreign firms in domestic and foreign markets”; 5) “make regulation efficient, effective, and appropriately tailored”; and 6) “restore public accountability within Federal financial regulatory agencies and rationalize the Federal financial regulatory framework.”

 

Trump has set in motion all that is necessary for the establishment of a sound economy, based upon sound money, that will restore Americans’ right to save their earnings for retirement without having to contend with inflationary theft.  Trump’s canny leadership promises an economic boom that may prove transformational, not only in America but across the globe.  As the Fed is gradually assimilated into the Treasury, Trump’s bank war ends without fanfare, by quietly turning the Fed’s energies to an America-first agenda.  Having overthrown the engine of America’s economic oppression, Trump will have gone a long way towards promoting genuine self-determination for Americans in money matters.  Indeed, individual liberty cannot flourish without the freedom to choose provided by a free economy.  Under the leadership of President Donald Trump, Americans will learn once again what it truly means to be free.

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Paul Dowling

Paul Dowling has written about the Constitution, as well as articles for Independent Sentinel, American Thinker, Godfather Politics, Eagle Rising, and Conservative Notions.

 

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4 COMMENTS

  1. Wow.

    Makes me think back to how many times through the years we heard that you can’t run the US like a business. It’s to big, too complex, etc.

    Says in the Bible God raises up who he will. Ronald Reagan comes to mind. The right man at the right time.

    And now, along comes Donald Trump.

  2. Now you know why the swamp rats hate him so. He will upset the gravy train apple cart before it destroys the republic forever. It really is Trump or a hybrid Zimbabwe/Cuba/Venezuela meltdown in November.
    Keep watch and never let your guard down because only the terminally distracted fall into the socialist trap.

  3. Many correct facts in the above piece. But the result of the money printing, bond buying and relief checks is most likely to result in a bond market decline, spiking rates, and stagflation – all to the detriment of the citizens and taxpayers of America.

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