The Truth About the Federal Reserve


This story begins back before the United States was the United States.

The original thirteen colonies printed their own currency, and it worked very well at empowering commerce and turning the young America into a powerful growing economy, free of the poverty and unemployment that even then crippled London. The public currency was operated as a public utility. But the bankers of Europe, long used to private banks issuing the public currencies as loans at interest, were horrified by the American approach and saw it as a threat to their deeply cherished religious belief that the gods intended for the bankers to have all the wealth of the world. So, the Bank of England lobbied King George III to impose the Currency Act on the colonies, which forbade the colonies to use their own money and required them to borrow their lawful tender from the Bank of England, at interest. This was the public currency as a private for-profit operation.

It took only a few years for this scheme to reduce the formerly prosperous and productive colonies down to the poverty and unemployment typical of London at the same time period, as depicted in the literature of Charles Dickens, among others.

While the state-run American schools teach that the revolution was about the Stamp act and the Tea tax, it was primarily the rage created by the enforced impoverishment of the Currency Act which fueled the rebellion. Why the Currency Act is not mentioned in the public schools will become apparent further on.


Following the American Revolution, the Founding Fathers reverted back to the system which had worked so well before the Currency Act.


As the above diagram shows, the Founding Fathers of this nation set up a simple economic system that did not rely on a private central bank. Government issued the public currency and spent it into circulation where it was used by the public free of interest. Then the money was taxed back into the government’s hands, then to be re-spent back into circulation. For each fiscal year the money issued equaled the money collected. Nothing was lost. The dollar was based on a weight measure of silver, which meant the value of a dollar was fixed and not subject to the whims of government or bankers.


This is a system which has worked very well for the civil population throughout history. It made the new nation immediately prosperous. This alarmed the European banking clans, which feared the American inspiration might spread to other nations (as it did to France in 1793). Where Britain’s military might failed, politics succeeded and spurred on by Alexander Hamilton, the first Bank of the United States was granted a 20 year charter in 1791. Almost immediately, the spiraling debt in the government budget, championed as necessary for international commerce by Hamilton, began to drain the livelihood of ordinary Americans. The furor over the debt was one of many issues that led to the famous duel between Hamilton and Aaron Burr which resulted in Hamilton’s death on July 11, 1804. As a side note, the pistols which were used in the duel are today in the possession of J. P. Morgan Chase & Co. Hamilton continues to be lionized by the private banking cartels he championed.

“Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burden all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs.” –Thomas Jefferson

By 1811, the owners of the First Bank of the United States had become rich while ruining the lives of ordinary Americans. Congress had prudently limited the charter of the bank to 20 years and it expired in 1811. A move to re-charter the bank failed due to public opposition.

“The Bank of the United States is one of the most deadly hostilities existing, against the principles and form of our Constitution. An institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical moment, upset the government. I deem no government safe which is under the vassalage of any self-constituted authorities, or any other authority than that of the nation, or its regular functionaries. What an obstruction could not this bank of the United States, with all its branch banks, be in time of war! It might dictate to us the peace we should accept, or withdraw its aids. Ought we then to give further growth to an institution so powerful, so hostile?” –Thomas Jefferson


The following year, with the conclusion of Britain’s wars with Napoleon, the Bank of England demanded King George re-invade the United States to force them back into the clutches of private central banking, this time with the Bank of England. Thus was initiated the war of 1812, a war like any other war; created and waged for profit.


The war of 1812 failed, and again political and monetary pressure succeeded where military force had failed, and in 1816, President Madison chartered a Second Bank of the United States, in part to deal with the expenses created defending the nation from Britain a second time and the runaway inflation caused by private banks issuing their own banknotes without restraint. Like the First Bank of the United States, the second one was granted a 20 year charter. By the time the charter was due to expire, the nation was once again struggling with debt and poverty while the bankers were growing richer every day.

As a result, Andrew Jackson opposed the renewal of the bank charter and made it a major platform of his campaign in 1832.

“Gentlemen, I have had men watching you for a long time and I 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 intend to rout you out, and by the Eternal God, I will rout you out.” — Andrew Jackson

In 1835, an unemployed painter, Richard Lawrence, attempted to shoot President Jackson twice, with both pistols failing to fire. Lawrence gave as his reason for the attack that with the President dead, money would be more plentiful, an obvious reference to Jackson’s veto of the re-chartering of the Second Bank of the United States. As a footnote, following the loss of its charter, the Second Bank of the United States attempted to continue as an ordinary bank, but went bankrupt in 1841.


The following diagram shows the principle difference with the central bank system as opposed to the original economic system of the United States.


As you can see, the main difference between the economic system created by the Founding Fathers and the current system is that the control of the printing presses has been given over to the private central bank. The government no longer prints up and spends the money it needs to operate, but BORROWS the money from the private central bank, at interest! Then the money is spent into circulation and winds its way through the population, and is then collected back in taxes. But here is the problem. Taxes now have to collect back MORE money than the government spent in order to pay the interest back to the private central bank. Over time, relentlessly, the private central bank is acquiring wealth from the population, in essence charging the people a fee for doing what the government itself originally did for free. That is the major difference between the economic system created by the nation’s founders (the reason we fought a war to be free of the Bank of England) and the system we have today.

It is because we have been sold back into the debt slavery of a private central bank that the history of the Currency Act and its impact on the American Revolution is marginalized in the state-controlled schools. We are brainwashed into believing that the Revolution was about soggy tea!

“If the debt which the banking companies owe be a blessing to anybody, it is to themselves alone, who are realizing a solid interest of eight or ten per cent on it. As to the public, these companies have banished all our gold and silver medium, which, before their institution, we had without interest, which never could have perished in our hands, and would have been our salvation now in the hour of war; instead of which they have given us two hundred million of froth and bubble, on which we are to pay them heavy interest, until it shall vanish into air… We are warranted, then, in affirming that this parody on the principle of ‘a public debt being a public blessing,’ and its mutation into the blessing of private instead of public debts, is as ridiculous as the original principle itself. In both cases, the truth is, that capital may be produced by industry, and accumulated by economy; but jugglers only will propose to create it by legerdemain tricks with paper.” –Thomas Jefferson


But the banks were still constrained by the Coinage Act of 1792, which defined a dollar as 371.25 grains of pure silver, matching the common silver currency in use around the world at the time, or that weight of gold which would match in value 371.25 grains of pure silver, 24.75 grains, 1/15 the weight of the silver in a silver dollar.

It wasn’t the coin that was the money, but the metal the coin contained.

Of course, carrying around large amounts of silver was difficult, so paper certificates were issued, both silver and gold certificate, as a convenience. But those paper certificates were not the money. They were claim checks. They were accepted as items of value because you could walk down to the banks and turn the claim checks in for the appropriate amount of silver or gold. But the metal was the money, not the engraved coins and not the paper.

The bankers could only loan out as much money, based on silver or gold, as they had the silver and gold to cover in their vaults. The adherence to gold and silver as a unit of value was a major limitation on the bankers’ activities.


Then in 1861, the Confederacy broke free of the United States. Abraham Lincoln sought financing from the bankers for the war effort, but balked at the usurious high interest rates the banks demanded. Declaring that he would not enslave the white people to the bankers to free the black people, Abraham Lincoln exercised his Presidential Authority to issue a new government currency; the greenback.


However in order to make the currency work and to cover the escalating costs of the War, Lincoln was forced to abandon convertibility, meaning that the paper notes became the money and were not convertible to silver or gold (despite the flood of silver from the Comstock strike of 1857, which eventually led to Nevada’s rapid statehood and Federal taxation in 1864). While there was inflation at the time, the government-issued currency, free of interest to a private bank, worked well during the war years, and Abraham Lincoln declared his intention to keep issuing the Greenbacks after the war’s conclusion. This did not please the world’s bankers at all.

An 1865 London Times editorial directed against Lincoln’s debt-free Greenbacks said it all:

“If that mischievous financial policy which had its origin in the North American Republic during the late war in that country, should become indurated down to a fixture, then that Government will furnish its own money without cost. It will pay off its debts and be without debt. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe.” –London Times

Following Abraham Lincoln’s assassination, Congress voted to end the Greenbacks, but did not restore convertibility. Banks could issue notes without regard to actual bullion reserves and a period of intense post-war inflation and speculation resulted.


Congressman Charles A. Lindbergh, Sr. revealed the Bankers Manifesto of 1892 to the U.S. Congress somewhere between 1907 and 1917. The source was an article written by Louis Even and published in United States Bankers Magazine 1892.

We (the bankers) must proceed with caution and guard every move made, for the lower order of people are already showing signs of restless commotion. Prudence will therefore show a policy of apparently yielding to the popular will until our plans are so far consummated that we can declare our designs without fear of any organized resistance.

Organizations in the United States should be carefully watched by our trusted men, and we must take immediate steps to control these organizations in our interest or disrupt them.

At the coming Omaha convention to be held July 4, 1892, our men must attend and direct its movement or else there will be set on foot such antagonism to our designs as may require force to overcome.

This at the present time would be premature. We are not yet ready for such a crisis. Capital must protect itself in every possible manner through combination (conspiracy) and legislation.

The courts must be called to our aid, debts must be collected, bonds and mortgages foreclosed as rapidly as possible.

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 the 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.

The question of tariff reform must be urged through the organization known as the Democratic Party, and the question of protection with the reciprocity must be forced to view through the Republican Party.

By thus dividing voters, we can get them to expend their energies in fighting over questions of no importance to us, except as teachers to the common herd. Thus, by discrete actions, we can secure all that has been so generously planned and successfully accomplished.


In 1900 President McKinley kept a campaign promise to bring back convertibility by signing the Gold Standard Act, making the Gold Standard the basis for all US currency, even though much of the coinage issued remained silver. McKinley did this because of the public perception that the US Banking system was weak and corrupted, and because the gold strikes in California, Alaska, and Colorado bolstered the US Treasury’s stock of that metal.

One year later, President McKinley was assassinated by Leon Czolosz, who explained his attack at his execution saying,”I killed the President because he was the enemy of the good people – the good working people.”


In 1910, a group of private bankers met at a private island named Jekyll Island to plan the imposition of yet another private central bank on the people of the United States. As part of the ruse, they abandoned the unpopular name “Bank of the United States” and chose the name Federal Reserve to grant themselves the illusion that this was a government agency, when in point of fact it is just another privately owned central bank. Pretenses to the contrary notwithstanding, the Federal Reserve is no more “Federal” than Federal Express. It is a privately owned bank. Three years later, in 1913, Congress voted the Federal Reserve act and President Wilson signed it, redeeming a campaign promise to his financial backers. Six years later, as his Presidency came to a close, Woodrow Wilson wrote.


“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is now controlled by its system of credit.We are no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.” — Woodrow Wilson 1919

Because of the earlier disasters with 20 year charters, the Federal Reserve was granted a 100 year charter due to expire in 2013. A later Congress amended the Federal Reserve act to make the charter permanent.


For a while, the new Federal Reserve was still bound by the requirements of the Gold Standard. Under the law, they were required to have enough gold on hand to redeem 40% of the paper notes they had issued. The Federal Reserve claimed that this requirement limited their ability to deal with the financial crash of 1929, and after years of lobbying, finally persuaded incoming President Franklin Roosevelt to abandon the gold standard entirely in 1933 and to confiscate all gold and gold certificates in order to make the gold available to the US Government for war funding purposes.

In looking back at the crash of 1929 it became obvious that reckless speculation had created the over-valued market bubble, while easy credit for buying stocks on margin drew in working-class people; people who did not have risk capital to play with, to form each succeeding layer of a rapidly-building pyramid doomed to eventual collapse. In the wake of the melt-down, Congress passed the Banking Act of 1933, otherwise known as the Glass-Steagall Act, which created the FDIC to restore public confidence in the banks and stop the runs. Glass-Steagall also included a ban on bank holding companies from owning other financial institutions, which was seen as a major contributing factor to the reckless speculation which precipitated the crash.


The Federal Reserve completed their plan for the economic subjugation of the American people in 1964, one year after the assassination of President John F. Kennedy. Silver coins and certificates were still in general use; this is money that came from the government and was used free of interest. Since the money was something of value and owned by whoever held it, the banks made no profit off of the use of that money and more to the point, could not manipulate its value.

Then President John F. Kennedy signed Executive Order 11110 on June 4th, 1963. This order authorized the Treasury to issue a new government currency, the US Note, based on silver in Fort Knox, recycled from the huge magnets used in early Uranium enrichment at Oak Ridge. This allowed the Kennedy administration to purchase four billion dollars worth of goods and services without having to borrow the money from the Federal Reserve, and signaled Kennedy’s intention to restore the nations’ economic system to the model used by the Founding Fathers.

Five months later, John Kennedy was assassinated and his US Notes withdrawn from circulation. The Warren Commission, now widely acknowledged to have been a cover-up, included as a member John J. McCloy, President of Chase Manhattan Bank and President of the World Bank.


The following year, all silver coins and silver certificates were withdrawn from circulation. The media proclaimed the new clad coinage and the Federal Reserve Notes to be just as good as the silver money, and the entrapment of the American people was complete. From then on, all currency in circulation was worth what the private central bank said it was worth, and over time, it has been declared worth less and less. Just see how many “dollar” notes it takes to buy an original US Silver Dollar today!


Unlike the economic system of value instituted by the Founding Fathers, the Federal Reserve System is a debt-based economy. All money, whether issued through the government, or by member banks to the public, is the result of a loan from that Private Central Bank. And therein lies the trap, because the moment that first Federal Reserve Note went into circulation, more money is owed to the banking system than actually exists! The debt can never be paid off.

The system perpetuates only so long as an ever-larger group of new borrowers can be found to create new money to pay the interest on the old money. That is what makes it a pyramid. More money is created out of thin air in response to a loan, but the total debt still exceeds the total money supply. That is why the government and media always talk about the “growth” of the economy. “Growth” may sound like a good thing to the unenlightened, but in a debt-based economy, “growth” means “nation and its people deeper in debt-slavery”. And because it is a pyramid, if the economy does not grow, that is, if more new debt cannot be created to service the interest on the old debt, the pyramid collapses, which is what is happening now.

The Federal Reserve System is designed to suck the real wealth out of the nation and put it in the pockets of the bankers, and now that they have succeeded, the system is breaking down, too cash-poor to operate efficiently, just as it did in the colonies in the early 1770s under the Bank of England. The system is broken because the bankers have all the wealth, and absent a new source of wealth to pay the bankers’ interest charges and fees, the system is locking up.

Of course, it is all paper debts and make-believe obligations. The money owed to the bankers by the government never existed in the first place. It’s just part of the scam by which the bankers enslave the world, which is the real essence of banking; to hold nations and people perpetually in debt-servitude or indentured service, with the government bribed to not take action to ameliorate the situation!

This is the very essence of the banking industry; to make us all, whether we be nations or individuals, slaves to debt!

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…I believe that banking institutions are more dangerous to our liberties than standing armies… The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” –Thomas Jefferson