Was I a lucky boy today, when I ran across this awesome article by a supposed PhD in Economics. To be exact, Edward Flaherty, Ph.D. Department of Economics College of Charleston, S.C. This guy is so delusional and so liberal that he actually produces a document of lies and tries to make it factual based on his education and by syndicating his factless article on many sites. I will now debunk his debunking!
Dr. Flaherty wrote:
Facts: Yes, the Federal Reserve banks are privately owned, but they are controlled by the publically-appointed Board of Governors. The Federal Reserve banks merely execute the monetary policy choices made by the Board. In addition, nearly all the interest the Federal Reserve collects on government bonds is rebated to the Treasury each year, so the government does not pay any net interest to the Fed.
OK. First off, the seven “publicly-appointed” governors are in fact NOT public. They are appointed by the Presideent and approved by the senate for 14 year terms! You call that publicly? No Congress, no elections? Please….. The comment on monetary policy is insane. The do far more, like borrowing, lending, QE2, and screwing with the interests rates.
Now, do you really think they don’t make money? Really, twelve huge banks, do it all for free. What, there aren’t fees, inflation or interest? Here is from Malaki on the Ron Paul Forums:
New money is always either created by banks using fractional reserve banking to loan out money; by the federal reserve buying treasury bonds off the market (the fed needs to buy as much as they need to to maintain desired rates, basically the treasury creates the mandate to create the new money, and the fed must do it); loans from the federal reserve to the banks, and more recently investment banks as well.
note: From what I understand if the fed didn’t buy up treasury bonds lets say cuz they said the gov spent too much and it was too much inflation, the value of the treasury bonds would go to zip and that basically means bankruptcy. So it’s the system that’s corrupt and not specifically the fed board and chairmen.
The people who get the new money first get the full value of it, then it trickles down through the economy and pushes the value of all dollars down by the time they get to the rest of us. The lower down you are in the economic food chain; the trail of new money through the economy, the more you lose at life. Basic wage earners / taxpayers / consumers are of course the bottom rung.
So even though they don’t necessarily charge YOU interest, each note initially issued comes from some sort of debt. The money actually represents debt. Not only is our currency almost literally debt, we export debt (our biggest export, by far) in the form of securities and other crazy shiz on top of treasury bonds. In the case of mortgage securitys, the bank sells your debt to foreigners. Well technically t-bonds are our debt as well. (Most)Politicians all retire wealthy they aren’t sweating the rest of us
Debt base economy = fail [unless your politically connected top 1%]
Fact: Independent accounting firms conduct full financial audits of the Federal Reserve banks and the Board of Governors every year. The Fed is also subject to certain types of audits from the Government Accounting Office.
Really Dr. Flaherty? Is that why Dr. Ron Paul is trying to pass a bill to audit the Federal Reserve with dozens of co-sponsors? So why would that crazy Congressman try to do that when you could already audit the Federal Reserve. That FACT you presented right there destroys all your integrity on this issue.
Then he says that the Federal Reserve only owns 7% of the debt. First off, I think it’s a tad more than that, but who cares. He, China owns 2 trillion that was funded through the Federal Reserve.
Finally, the nut said this:
Facts: Kennedy wrote E.O. 11,110 to phase out silver certificate currency, not to issue more of it. Records show Kennedy and the Federal Reserve were almost always in agreement on policy matters. He even signed legislation to give the Fed more authority to issue currency.
Cute. Here is Excutive Order 11110
By virtue of the authority vested in me by section 301 of title 3 of the United States Code, it is ordered as follows:
SECTION 1. Executive Order No. 10289 of September 19, 1951, as amended, is hereby further amended —
(a) By adding at the end of paragraph 1 thereof the following subparagraph (j):
“(j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12, 1933, as amended (31 U.S.C. 821 (b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of any outstanding silver certificates, to prescribe the denominations of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption,” and
(b) By revoking subparagraphs (b) and (c) of paragraph 2 thereof.
SEC. 2. The amendment made by this Order shall not affect any act done, or any right accruing or accrued or any suit or proceeding had or commenced in any civil or criminal cause prior to the date of this Order but all such liabilities shall continue and may be enforced as if said amendments had not been made.
JOHN F. KENNEDY
THE WHITE HOUSE,
June 4, 1963
Here was the result of Executive Order 11110:
As the $10 and $20 bills were being printed, President Kennedy was assassinated. Directly after that, the production of US Silver certificates was stopped by LBJ. Sorry Dr. Flaherty, whether or not that he supported the Federal Reserve does not mean that he did not want to do what was best for the country. By producing Silver Certificates, the US Governement had $4.3 billion in silver to