Federal Reserve caused Great Depression


| Home | Business Plot for Fascist Coupe US 1933, General Smedley Butler | POLITICAL QUOTES | Myth that WWII ended the Great Depression | The economic allegory in the Wonderful Wizard of OZ | Laissez Faire Capitalism Sucks--Arianna Huffington | Debt ratios U.S. & Japan | shadow banking | GDP figures more lying numbers | Economist's Journal Article on the Implosion & Cure | Links | Prediction for 2013--clift? | Federal Reserve caused Great Depression

Federal Reserve Caused the Great Depression by its tight-money policy

Bernanke is particularly interested in the economic and political causes of the Great Depression, on which he has published numerous academic journal articles. Before Bernanke's work, the dominant monetarist theory of the Great Depression was Milton Friedman's view that it had been largely caused by the Federal Reserve's having reduced the money supply. In a speech on Milton Friedman's ninetieth birthday (November 8, 2002), Bernanke said, "Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna [Schwartz, Friedman's coauthor]: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."[45]  Bernanke found that the financial disruptions of 1930–33 reduced the efficiency of the credit allocation process; and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand, identifying an effect he called the financial accelerator. When faced with a mild downturn, banks are likely to significantly cut back lending and other risky ventures. This further hurts the economy, creating a vicious cycle and potentially turning a mild recession into a major depression.[48] Economist Brad DeLong, who had previously advocated his own theory for the Great Depression, notes that the current financial crisis has increased the pertinence of Bernanke's theory.[49]http://en.wikipedia.org/wiki/Ben_Bernanke 

This would have been done with the approval and encouragement of including Hoover and other economists.   

Bernanke Doctrine:

Bernanke emphasized that Congress gave the Fed responsibility for preserving price stability (among other objectives), which implies avoiding deflation as well as inflation. He stated that deflation is always reversible under a fiat money system. Where currency is under a monopoly of issuance, or where there is a regulated system of issuing currency through banks which are tied to a central bank, the monetary authority has the ability to alter the money supply and thus influence the interest rate (to achieve monetary policy goals). Bernanke asserted that the Fed "has sufficient policy instruments to ensure that any deflation that might occur would be both mild and brief".[1]

To combat deflation, Bernanke provided a prescription for the Federal Reserve to prevent it. He identified seven specific measures that the Fed can use to prevent deflation.

1) Increase the money supply (M1 and M2).

"The US government has a technology, called a printing press, that allows it to produce as many dollars as it wishes at essentially no cost." "Under a paper-money system, a determined government can always generate higher spending and, hence, positive inflation."[1]

2) Ensure liquidity makes its way into the financial system through a variety of measures.

"The U.S. government is not going to print money and distribute it willy-nilly ..."although there are policies that approximate this behavior."[1]

3) Lower interest rates – all the way down to 0 per cent.

Bernanke observed that people have traditionally thought that, when the funds rate hits zero, the Federal Reserve will have run out of ammunition. However, by imposing yields paid by long-term Treasury Bonds,

"a central bank should always be able to generate inflation, even when the short-term nominal interest rate is zero ...[this] more direct method, which I personally prefer, would be for the Fed to announce ceilings for yields on all longer-maturity Treasury debt."[1]

He noted that Fed had successfully engaged in "bond-price pegging" following the Second World War.

4) Control the yield on corporate bonds and other privately issued securities. Although the Federal Reserve can't legally buy these securities (thereby determining the yields); it can, however, simulate the necessary authority by lending dollars to banks at a fixed term of 0 per cent, taking back from the banks corporate bonds as collateral.

5) Depreciate the U.S. dollar. Referring to U.S Monetary Policy in the 1930s under Franklin Roosevelt, he states that:

"This devaluation and the rapid increase in money supply ... ended the U.S. deflation remarkably quickly."[1]

6) Execute a de facto depreciation by buying foreign currencies on a massive scale.

The Fed has the authority to buy foreign government debt ... [t]his class of assets offers huge scope for Fed operations because the quantity of foreign assets eligible for purchase by the Fed is several times the stock of U.S. government debt."[1]

7) Buy industries throughout the U.S. economy with "newly created money". In essence, the Federal Reserve acquires equity stakes in banks and financial institutions. In this "private-asset option," the Treasury could issue trillions in debt and the Fed would acquire it, still using newly created money.

Enter content here

Enter supporting content here

For the best account of the Federal Reserve  (http://www.freedocumentaries.org/film.php?id=214).  One cannot understand U.S. politics, U.S. foreign policy, or the world-wide economic crisis unless one understands the role of the Federal Reserve Bank and its role in the financialization phenomena.  The same sort of national-banking relationships as in our country also exists in Japan and most of Europe. 


A democracy exists whenever those who are free and poor are in sovereign control of the government; an oligarchy when the control lies in the hands of the rich and better born.”—Aristotle

“All for ourselves, and nothing for anybody else,” Adam Smith called this the vile maximum of the masters of mankind.  Neoliberals call it, “trickle-down economics.” 


In 1963, John F. Kennedy issued Executive Order 11110 which would have removed the power of money creation from all US private banks, including the privately-owned Federal Reserve, and invested that power in the US Government. Unfortunately, Kennedy died suddenly a few weeks later and his plans died with him.


The Problems of Debt

In the USA 100% of the money supply is created by the private banks. In Britain the figure is over 97%. In the rest of the world, the figure is estimated to be over 95%. All this money is created as a debt. It is created when people borrow money, as banks do not lend existing money; they just create new money out of thin air to lend.

Money created as a debt by the banks bears a charge of interest. This increases the amount of money that the economy owes by an amount greater than the amount in existence. This means that the economy is a saddled with a debt that can never be paid off, merely passed around like a game of Pass-the-Parcel in a Belfast pub. It is like a game of musical chairs, where someone has to lose out.


A Solution

Money does not have to be based on debt, nor indeed does it have to be based on precious metals. Real wealth is the goods and services that people create for each other. Money is merely a means of exchange. It could be created by HM Treasury and spent on providing public services, saving us all a modicum of taxation, and then the economy would not have to be saddled with large debts.

Executive Order 11110 issued by John F. Kennedy on June 4th 1963, from Wikipedia

This executive order allows the U.S. Secretary of the Treasury to issue $4.29 billion in silver certificates ($2 and $5 Notes) against silver bullion based on authority delegated by the President to the Secretary under the Thomas Amendment to the Agricultural Adjustment Act.


Silver certificates were printed without interest. The Order was for the Treasury to issue silver certificates against all silver held by the government which did not already have certificates against it. The Order was needed due to the passage of Public Law 88-36 which repealed the Silver Purchase Act and other related monetary measures. One result was that after the repeals, only the President could issue new silver certificates.  The Federal Reserve System could replace the certificates, but only in larger denominations. The thrust of the Order returned the authority to issue new silver certificates (and specify denominations) back to the U.S. Treasury.


This theory was further explored by U.S. Marine sniper and veteran police officer Craig Roberts in the 1994 book, Kill Zone.[28] Roberts theorized that the Executive Order was the beginning of a plan by Kennedy whose ultimate goal was to permanently do away with the United States Federal Reserve, and that Kennedy was murdered by a cabal of international bankers determined to foil this plan.  [jk finds this the most plausible of a dozen theories.  Kennedy had expressed extreme frustration of the Bay of Pigs failure and other issues with the CIA.  But it is hard to believe that the CIA would on its own, for to protect its power structure, kill the President.]

This executive order allowed for the Federal Reserve System to distribute and exchange currency at lower denominations that met the growing economic need. The authoritative basis for the Order was substantially nullified in 1982 with the passage of Public Law 97-258. The Order was never directly reversed, but in 1987, Executive Order 12608 [by Ronald Reagan] revoked the section that added by Executive Order 11110[1], essentially nullifying it.


Kennedy was killed by more than one shooter, and from 2 directions.  See Wikipedia Kennedy assassination conspiracy theories.


1)  Former U.S. Marine sniper Craig Roberts and Gunnery Sergeant Carlos Hathcock, who was the senior instructor for the U.S. Marine Corps Sniper Instructor School at Marine Corps Base Quantico in Quantico, Virginia, both said it could not be done as described by the FBI investigators. “Let me tell you what we did at Quantico,” Hathcock said. “We reconstructed the whole thing: the angle, the range, the moving target, the time limit, the obstacles, everything. I don’t know how many times we tried it, but we couldn’t duplicate what the Warren Commission said Oswald did. Now if I can’t do it, how in the world could a guy who was a non-qual on the rifle range and later only qualified 'marksman' do it?”[13]

2)  Robert McClelland, a physician in the emergency room who observed the head wound, testified that the back right part of the head was blown out with posterior cerebral tissue and some of the cerebellar tissue was missing. The size of the back head wound, according to his description, indicated it was an exit wound, and that a second shooter from the front delivered the fatal head shot.[11]

3)  Kennedy's death certificate located the bullet at the third thoracic vertebra — which is too low to have exited his throat.[14] Moreover, the bullet was traveling downward, since the shooter was by a sixth floor window. The autopsy cover sheet had a diagram of a body showing this same low placement at the third thoracic vertebra. The hole in back of Kennedy's shirt and jacket are also claimed to support a wound too low to be consistent with the Single Bullet Theory.[15][16]

These three facts are sufficient to prove that the Warren commission was a high-level cover-up




The Secrets of the Federal Reserve - Eustace Mullins
The Creature from Jekyll Island - the Federal Reserve - G. Edward Griffin
Web of Debt - The Shocking Truth About Our Money System - Ellen Hodgson Brown
The Case Against the Fed - Murray N. Rothbard

Naked Capitalist, The - W. Cleon Skousen
Wall Street and the Rise of Hitler - Anthony Sutton
A History of Money and Banking in the United States - Murray N. Rothbard

excerpts from the book 'Tragedy and Hope' - A History of the World in Our Time by Carroll Quigley, 1966


Follow the Money to Citibank
Dirty Laundry-Multinational banks as bagmen for global crime syndicates
U.S. Banks and the Dirty Money Empire
Shell Game - Citibank attacks money-laundering regulations
Explosive Revelations - banks, tax havens, and money laundering
Servicing Citi's Interests - GATS and the Bid to Remove Barriers
to Financial Firm GIobalization
Give Us 0.01 Percent - Tobin tax
The Federal Reserve (6/06)

Confessions of a banker - Following money trail through offshore operations of Citibank (8/06)
Federal Reserve Bank (3/07)
Credit as a Public Utility: the Key to Monetary Reform (5/07)

Who Owns The Federal Reserve? (10/08)
What Banks, Academics, the Media and Politicians Don't Tell You About Money - November 2008
The Federal Reserve Abolition Act (12/08)
Ground Zero on Wall Street - Nationalize Federal Reserve (12/08)
The Wall Street Ponzi Scheme called "Fractional Reserve" Banking (12/08)
Nationalize the Federal Reserve - "American Monetary Act" (2/09)
President Obama: Nationalize the Fed and Create Our Own Money (2/09)
A New Monetary System (3/09)
Thinking Positively About Monetary Policy - Nationalizing the Federal Reserve (3/09)

The Big Takeover - how Wall Street insiders are using the bailout to stage a revolution (4/09)
Revive Lincoln's Monetary Policy - an open letter to President Obama (4/09)
Top Senate Democrat: Bankers 'Own' the US Congress (5/09)
The Weimar Hyperinflation? Could it Happen Again? (5/09)
Manipulation: How Markets Really Work (5/09)
Ending Today's Economic Crisis Simply and Easily, in America and Globally (5/09)
What the Big Banks Have Won [Wall Street Bailout] (6/09)
Great American Bubble Machine - Goldman Sachs & market manipulation (7/09)



Teddy Roosevelt's advice that, "We must drive the special interests out of politics. The citizens of the United States must effectively control the mighty commercial forces which they have themselves called into being. There can be no effective control of corporations while their political activity remains."