A History Of Stimulus, Funny Money & Central Banking
S. Gompers

World history is filled with examples of "funny money policies", and the Federal Reserve's and our government’s feeble attempts at stimulus are just a new name for old games. 

For as Ecclesiastes 1:9 states "What has been will be again, what has been done will be done again; there is nothing new under the sun."

If we look to Roman history we see a story of funny money and stimulus. Rome conquered, grew, and with each conquest returned with more stimulus in the form of gold, silver, land, and slaves. But the stimulus injected into the economy after each conquest only stimulated the need for more stimulus. It did not stimulate real prosperity. It undermined it.

First the ensuing slave markets destroyed the labor markets as rich landowners used the slave labor to ruin small farmers. Then as wheat began to be imported from the conquered provinces, as tribute (tax), this had a crippling effect on the large landowners as well. And Rome was now completely dependant on foreigners for their food.

In the first century Roman expansion reached the point of diminishing returns; the stimulus generated by conquest came to an end. But the borders still had to be protected. And Roman mobs of displaced workers and small landowners needed to be fed and distracted, which drained the treasury.

Caesar Augustus tried to solve the problem with more stimulus by increasing the money supply the only was he could. He ordered the slaves in the mines to work around the clock. But this did not bring prosperity, it brought inflation. Then when output from the mines could no longer be increased, Nero found a new source of stimulus; he reduced the silver content in the coins. By the time Rome fell there was almost no silver in their currency.

Another example is Spain in the 16th century. The conquistadors increased Spain’s money supply the old fashioned way, by stealing it. As galleons began arriving in Spain with their plunder from the America’s, increasing the money supply substantially, they had so much stimulus that they laid down their tools. After all, why should they work, when they could buy things. Spain, like Rome, welcomed stimulus and never recovered from it.

Spain’s bounty affected all of Europe as well, and between 1540 and 1640 the cost of living increased dramatically throughout Europe. But Spain still defaulted on their debts every 15 to 20 years, as they spent the loot faster than it could be dug out of the ground.

The revolution was powered by two very different engines: one driven by 18th-century Enlightenment values, the other guided by Christian imperatives that grew out of the Great Awakening. The former movement, emphasizing freedom of conscience, stressed freedom from the dictates of organized religion. The latter, stemming from a devout reading of the Gospels, demanded freedom for religion. Together, these seemingly opposite world-views collaborated brilliantly and effectively to establish the separation of church and state in America. Yet both groups, with seemingly opposing views, managed to agree on the fact that a central bank was not only dangerous, but created ALL oppression where they had come from.

As President John Adams said,

"All the perplexities, confusion and distress (crime, poverty, substance abuse, family disintegration, government immorality and dishonesty, etc.) in America arise, not from defects in the Constitution or confederation, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation." This is because nearly every part of our lives revolves around money in some way. If we clear up the money problem, all sorts of seemingly unrelated problems will simply vanish!"

Thomas Jefferson said,

"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the Government at defiance. The issuing power should be taken from the banks and restored to the people to whom it properly belongs."

And the list goes on and on…

There have been several attempts at central banking in our nation's history. Those who failed before, while deceptive and fraudulent, pale in comparison to the scope and size of the fraud being perpetrated by our current FED. What they all have in common is the practice of "fractional banking."

Fractional banking or fractional lending is the ability to create money from nothing, lend it to the government or someone else and charge interest to boot. The practice evolved before banks existed. Goldsmiths rented out space in their vaults to individuals and merchants for storage of their gold or silver. The goldsmiths gave these "depositors" certificates that showed the amount of gold stored. These certificates were then used to conduct business.

In time the goldsmiths noticed that the gold in their vaults was rarely withdrawn. Small amounts would move in and out but the large majority never moved. Sensing a profit opportunity, the goldsmiths issued double receipts for the gold, in effect creating money (certificates) from nothing and then lending those certificates (creating debt) to depositors and charging them interest as well.

Since the certificates represented more gold than actually existed, the certificates were "fractionally" backed by gold. Eventually some of these vault operations were transformed into banks and the practice of fractional banking began.

Lincoln recognized the threat of the banking cartels when he wrote:

"The government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers..... The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity. By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest, discounts and exchanges. The financing of all public enterprises, the maintenance of stable government and ordered progress, and the conduct of the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own government. Money will cease to be the master and become the servant of humanity. Democracy will rise superior to the money power." Abraham Lincoln Senate document 23, Page 91. 1865

The Europeans recognized the danger to their financial cartels when the London times published in 1865 this piece regarding our government printing its own currency as Lincoln wished to do:

"If this mischievous financial policy, which has its origin in North America, shall become endurated down to a fixture, then that Government will furnish its own money without cost. It will pay off debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous without precedent in the history of the world. The brains, and wealth of all countries will go to North America. That country must be destroyed or it will destroy every monarchy on the globe." - Hazard Circular - London Times 1865.

Mary Todd Lincoln, upon hearing of her husband's death, began screaming, "Oh, that dreadful house!" Earlier historians felt that this spontaneous utterance referred to the White House. Some now believe it may have been directed to Thomas W. House, a gun runner, financier, and agent of the Rothschild's during the Civil War, who was linked to the anti-Lincoln, pro-banker interests.

What a shame we did not go through with it, for that plan died with Lincoln. By now we would be a truly prosperous nation, free of debt to foreigners.

Even after the Civil War, banking cartels continued to vie for control of our nation. Congressman Charles A. Lindbergh revealed to Congress the bankers Manifesto of 1892 which stated:

"When through the process of law, the common people have lost their homes, they will be more tractable and easily governed through the influence of the strong arm of the government applied to a central power of imperial wealth under the control of leading financiers. People without homes will not quarrel with their leaders. History repeats itself in regular cycles. This truth is well known among our principal men who are engaged in forming an imperialism of the world. While they are doing this, the people must be kept in a state of political antagonism."

Let’s see, I believe this means the banking cartels intended the government to be their tool, not the other way around. And the people must remain distracted.

"From now on, depressions will be scientifically created." - Congressman Charles A. Lindbergh Sr. 1913

The Federal Reserve Bank was created in 1913 and the more money it was able to print, the more "income" it was able to generate for itself. The FED is able to print money at will, and regulate value. By its very nature, it must forever keep producing debt to stay alive.

In 1920 the Fed called in a mass percentage of loans and overnight, over 5,000 banks collapsed. In 1929 the FED again called in loans en masse. This time, the crash caused 16,000 banks to fail and the stock market to fall through the basement floor. And the international banks and private and well protected banks within the FED system were able to snap up the failed banks and corporations for pennies on the dollar. It was the greatest robbery in history. 

Outraged, congressman Louis McFadden began bringing impeachment hearings against the Federal Reserve Board. He wrote:

"It was a carefully contrived occurrence. International bankers sought to bring about a condition of despair. So that they might emerge the rulers of us all".

After two assassination attempts McFadden died of an "intestinal flu", before he could push for the impeachment.

October 4, 1936

Attacks on Congressman McFadden's Life Reported

Commenting on Former Congressman Louis T. McFaddens's "heart-failure sudden-death" on Oct. 3, 1936, after a "dose" of "intestinal flu," "Pelley's Weekly" of Oct. 14 said:

....."Now that this sterling American patriot has made the Passing, it can be revealed that not long after his public utterance against the encroaching powers of Judah, it became known among his intimates that he had suffered two attacks against his life. The first attack came in the form of two revolver shots fired at him from ambush as he was alighting from a cab in front of one of the Capital hotels. Fortunately both shots missed him, the bullets burying themselves in the structure of the cab."

"He became violently ill after partaking of food at a political banquet at Washington. His life was only saved from what was subsequently announced as a poisoning by the presence of a physician friend at the banquet, who at once procured a stomach pump and subjected the Congressman to emergency treatment." - Robert Edward Edmondson (Publicist-Economist)

In 1933 the FED decided the gold standard needed to be abolished. Under the pretense of "helping to end the depression" you know, the one they started, everyone in America was required to turn in all bullion to the treasury. Under penalty of 10 years imprisonment, of course. This robbed the public of what little wealth they had left.

On June 4, 1963, a virtually unknown Presidential decree, Executive Order 11110, was signed. U.S. Treasury Notes began being printed, and entered into circulation. Our "moneyed priests" have a different take on this order, unfortunately, we will never know the truth. Within months JFK was killed, Treasury notes were recalled, and the Federal Reserve Note ruled again.

In the 150 years prior to 1971 nations could stimulate their economies with cash or credit to a point. They could overspend, but had to settle up in gold. After the gold window closed in 1971, the U.S. could square their debts with paper, and U.S. debt has been rising ever since. A debt that the money has never been created to repay, thanks to the Federal Reserve Act of 1913.

In the 1980’s we suffered the second most serious banking crisis in our 200 years. Some 1,500 commercial and savings banks, and 1,200 savings and loans failed. U.S. taxpayers were forced to make good on the losses after the S&L Insurance fund was exhausted. To the tune of 150 billion due to regulators denying the magnitude of the problem, and allowing it to worsen. One of the "Keating 5" just ran for President.

Challenged as being illegal in the 1990’s, Greenspan legalized the derivatives practice, which was really risky "gambling wagers". And soon hedge funds became an entire industry, gambling as much as they wanted.

After 9/11 The President told the nation to spend, and during a war, that’s what our nation did. It borrowed at unprecedented levels (trillions) to finance not only the war on terror but also to pay for tax cuts. The reserve requirements were reduced from 10% to 2.5% on Fannie Mae and Freddie Mac. And they were now free to lend even more at bargain basement interest rates, and only a fraction of the required reserves.

The market had become the largest in the world, but Americans, long maxed out on credit were beginning to feel the pinch. They had borrowed to pay for houses, cars, student loans, credit cards, groceries, etc... They refinanced their debt for lower rates and then the housing bubble popped leaving many owing more than their homes were worth.

This is all a very condensed version of our history of the "moneyed priests" activities, and with each "failure" on their behalf, they have prospered in blood or money. All at our expense. And yet once again we now face the abyss of their failed arrogance and greed.

America is self destructing and bringing the world down with it, due to the excessive greed and arrogance of our "moneyed priests". Who will merely move on to another "playpen" after exhausting every resource here. Many point to the sub prime mortgage collapse as the culprit; this only clouds the real issue. Because the whole system is based on hot air, that’s right, it’s a house of cards. The world’s economy is no longer Americas to control and the U.S. is now solidly indebted to the rest of the world. The largest act of criminal corruption has been perpetrated by our government and the FED for which it stands. It was the best game in town, get paid to sell vast amounts of risk, fail, and then receive bailouts from the taxpayers who never saw a penny of shared wealth to begin with.

The rich have always loved recession as things always become cheaper for them. And if you have money there are many opportunities in the markets and real estate today. The catch is you have to be able to afford to wait out the mess that has been created for them to make money.

The only thing that gives our money value is how much of it is in circulation, and if others recognize it. One only has to look to the South after the Civil War to see what happens to fiat currency when it is no longer recognized as having value, people wiped their butts, or used it as fire starters. The power to regulate the money supply is also the power to regulate its value. This is also the power to bring entire economies and societies to their knees. Many nations are talking about switching from the dollar on the oil markets to the euro and much of the Middle East is talking of doing the same. And China is clearly worried about the value of the dollar as well as our debt to them. This will be very detrimental to our economy.

So many Americans may be thinking that our foreign policy has nothing to do with them at home. However, world pressures are mounting against "us" in the U.S. and while foreign governments may not have issues with individual Americans they are taking increasing issue with American policy. One economic way they can "fight back" is to change how our basic world commodities are priced so that there is no longer a U.S. advantage built in. One small change to how oil is priced around the world may have a huge avalanche affect on how we prosper here at home.

The bailouts were meant to be stimulus, to get the banks lending again, thus freeing up credit markets. But instead were used as stimulus to redistribute the wealth upward to those who truly "deserve it", themselves. History proves that stimulus only creates the need for more stimulus, it does not create wealth, only production/ creation can do that. Yet our "moneyed priests" seek to destroy that mechanism for wealth creation in America by their lust for sending our jobs to other nations for even greater profits.

The U.S. economy is now based on money as the major product instead of actual products made or farmed in the USA. Many of these money products can only survive on debts. Today this funny money market is collapsing with many losing their homes. And instead of doing what they were supposed to do with the money, our "moneyed priests" partied like rock stars and bought up stocks in companies for pennies on the dollar, and rewarded themselves for their good "work". Just as they did in 1929, now all they have to do is wait out the slump, and divvy up the reward for creating the problem to begin with. And yet again accolades, promotions, and bonuses will abound. At the expense of the taxpayer, of course.

Aristotle called the birth of money from money " unnatural". Yet today it is glorified.

The game existed since before Christ, it has one goal. That goal is domination, and the tool to that end has been class warfare to destroy the middle class. Our forefathers warned us of this and created this nation as a haven to protect us from this plague of Europe. The system could be changed if the "sheeple" would awake, for our forefathers designed us a beautiful republic which has been defiled and turned into a "heroin addicted prostitute". The majority could rule, but in a land where everyone says, "my vote does not matter", the majority does not vote. But systemic change is required, or all you are doing is changing the name on the check for the bribe, I mean campaign contribution. I wonder where America would be right now in the recovery if S.2280 could have taken root in 2006.

For a novel twist, we should strive to create a political climate where wall street can not turn our politicians into their personal whores and get legislation passed or repealed to suit their greed.

S. Gompers

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes... Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." -- Napoleon Bonaparte, 1815

"If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference between the bond and the bill is the bond lets money brokers collect twice the amount of the bond and an additional 20%, whereas the currency pays nobody but those who contribute directly in some useful way. It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, but one promise fattens the usurers and the other helps the people. " - Thomas Edison, The New York Times


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