Central Banking America: A Review

Do We Need Central Banking

The constitution provides ample ways for the federal government to make money, it’s called tariffs, i.e. taxing imports and exports.  But, big business has such a stranglehold on congress that they gave China most favored nation status, so that stores like Wal-Mart and Target could sell plastic much cheaper than our very own American made products.

There was never a need for an income tax.  As it stands now, the only reason we have an income tax is to pay off the money we borrow form the federal reserve.

Without the federal reserve bank, who creates money out of thin air, the u.s. government could go back to doing what it should have been doing, printing it’s own money and putting the full faith and credit in U.S. backed currency, instead of federal reserve notes.  Income tax, as they stand now, simply pays off the interest of the federal reserve. At every session of congress, the house and senate then turn around and borrow more money from the federal reserve bank.

Without the federal reserve there would be no need for a national deficit.  The only reason we have one now, is that we are borrowing our own money from a private bank.  Everyone is under the delusion that the federal reserve is a centralized bank, i.e. a government bank.  It is neither a federal government owned entity, nor does it have the full faith and credit of the U.S. department of treasury behind it. It is very possible for it to go under.

Do We Need Central Banking?

Ask any fine upstanding citizen and they will say we NEED central banking.  Then if you dig deeper, you’ll see that they are fully indoctrinated by their own education.  The study of economics has been completely arrested and captured by Wall Street.  Want a job on Wall Street?  Make sure you’re educated exactly as everyone else is and believe that Keynesian Economics is your mantra.  Above all else, make sure that you, not only, not know anything about the Austrian School of economics, but that you mark it down as untenable and barbaric.

Keynesian economics assures mutually assured destruction of the U.S. and the rest of the world.  So the question is do we need a central bank?

The reasons put forth as to why we need a central bank:

  • 1)it issues coins and currency to commercial banks and other financial institutions.
  • 2)it provides short term loans for commercial banks.
  • 3)it controls the credit creation powers of commercial banks(for controlling inflation and deflation in the economy).
  • 4)it acts as a banker to the government(it keeps all of the government’s deposits and makes payments on it’s behalf).
  • 5)it acts as an adviser to the government(it advises the government as to what kind of economic policy it should adopt).
  • 6)it has major role to play in the money market of an economy(where short term loans are borrowed and lent).
  • 7)it re-discounts bills of exchange for commercial banks.

However, this is where the confusion comes in.  We have a department of treasury that can do all of that, that is completely limited by the constitution.  The federal reserve bank act of 1913 essentially circumvented the constitution.  What the real federal reserve now does is:

It’s primary function is to defraud the population for the benefit of the government, and the government’s pet favorites, such as the military industrial complex, the bankers themselves (in exchange for giving government a share of the money stolen), and whoever the government thinks it can bribe for votes. It’s literally that corrupt. The reason it can go on under our very noses is because most people don’t understand it.

What a central bank does is inflate the supply of money or money substitutes, in other words, it dilutes the existing stock of money by printing more pieces of paper and calling it money. This causes a number of serious negative side-effects.

The first one is that it causes a drop in the value of money. Your money is worth less. That’s why the dollar has lost 94 percent of its value since the Federal Reserve was started in 1913. Considering one of the main purposes of the federal reserve is to stabilize prices, we must conclude that it has been a complete failure, compared to the absence of a central bank.

The second negative effect is that inflation is government’s main means of funding wars which apart from being supremely immoral, are also extremely destructive of wealth. The USA has become a nation of perpetual war in case you haven’t noticed.

The third negative effect is that all the central bank is doing is re-distributing wealth. It’s not creating wealth – if it was, we would have found a way to create wealth by stamping pieces of paper. We haven’t. All it does is take property from people who own it, and give it entire industries who live at the expense of the productive classes. Basically the central bank enables governments to loot the savings of the entire population without having to bother rifling their pockets to do it.

The fourth negative effect is that the newly printed money creates a bubble in the sector where it enters the economy. That’s why there was a bubble in the housing sector – because that’s where government was injecting the money. The bubble draws capital away from actual productive activity, such as growing food, or making medicine, and channels it into wasteful activity like making condominiums with gold faucets and five bathrooms. This is because the bubble makes activity appear profitable that, absent the manipulation of the money supply, would be seen to be loss-making (think, for example, investing in real estate during the bubble. The profits made by the speculators and financiers come from skimming the wages of millions of people too poor to own their own house, all courtesy of the central bank).

The fifth negative effect is it distorts the capital structure, in other words, it causes massive dislocation between where people *are* and where people would be productively employed. The boom collapses into the bust with its bankruptcies, unemployment, homelessness, family breakdown, suicide, hardship, depression and ruined lives – all while the privileged continue slurping at the trough.

The sixth negative effect is moral. The policy of credit expansion corrupts the entire value system of society. It punishes work, savings, individual responsibility and building a future. It rewards debt, consumption, instant gratification, speculation and political favoritism.

The declared purpose of the Fed is full employment. In the time since the Fed has been on the job, we have had the two biggest depressions and highest unemployment in the history of the world.

The justifications given for the central bank – that it is necessary for government to “manage” the economy, presupposes that government has a competence to manage the economy in the first place. There is neither evidence nor reason to support this supposition.

The reason economists have the gall to try to justify this institutionalized fraud is because most of them rely, directly or indirectly, on the Federal Reserve or the federal government for their privileged existence. They are like the high priests of old preaching to the masses that Pharaoh can do no wrong even while he and his acolytes live at their expense.

Our central bank has not acted in good conscious toward the people of the U.S..  Time and again they have been asked if what they are doing are for the people and to do something about it, to which they unequivocally say “no”.

Interest rates on a savings account nationally is now at 0.01%  The highest yields are boasting a whopping 1.0% APR.

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Who Oversees the Federal Reserve Bank

Who Regulates the Fed

In a word, noone.  Officially, we have the propaganda that the federal reserve system is a quasi-governmental entity, but with semi-private privileges.  The explanation however goes in loops and tries to circumnavigate a very concise explanation. No one in government oversees the Fed.  No one in government can overrule the Fed.  No one can hold accountable the Fed.  No one in government can bring to justice the Fed.  In fact, the Fed is untouchable.  In fact, the Fed is above the law.  In fact, the Fed operates with impunity.

The Official Explanation of Who Regulates the Federal Reserve Banks

The Federal Reserve is a unique legal entity that can be described as an independent government agency with member bank participation. It is organized with a 100% government agency at the top (the Board of Governors), and branches beneath them that are organized like corporations with member banks as shareholders.(Ref: http://www.federalreserveeducation.org/fed101/structure/ , http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#4 )

The Board of Governors are all appointed for 14-year terms by the president and confirmed by congress. It operates per it’s charter and laws set by congress. it is overseen by congress. There is no structure or mechanism for private ownership at this level; it is a government agency. You can confirm this from a number of government sites that list it as a government agency (e.g. http://www.whitehouse.gov/government/independent-agencies.html) Board members are forbidden by law to have any economic interest in a private bank. (Ref: Title 12 chapter 3 of the U.S. Legal Code). The Board determines monetary policy and provides high level oversight of the branches.

The 12 branches can be considered highly regulated private corporations. Member banks are required to buy shares in their branch. Each bank has one vote. They can vote for 6 of their 9 board members, the other 3 are appointed by the Board of Governors. Though the branches are called non-profit, the member banks get a standard 6% dividend on their shares. The remaining ‘profit’ is turned over to the Treasury at the end of the year.

For confirmation on this, check out how Hoovers classifies them:
http://www.hoovers.com/free/search/simple/xmillion/index.xhtml?query_string=Federal+Reserve&which=company&page=1&x=91&y=2# HooversCompanyNameMatchesH2

And those shares that the member banks own? Some say there are so many restrictions that it falls short of true ownership

From Edward Griffin, noted anti-fed intellect (http://www.bigeye.com/griffin.htm)

“It’s a hybrid, part corporation and part government, part private, part government.
Every bank that’s in the system is an owner of the Federal Reserve… But that’s as far as it goes because those stock certificates do not carry with them any of the attributes of private ownership. For example, the holders of these certificates cannot sell them. If you can’t sell something then you don’t really own it, that’s one of the tests of ownership, your ability to dispose of it. You cannot sell it. Furthermore the larger banks put up more money than the smaller banks, it’s a ratio to their assets, so the larger banks have more stock certificates in the system than the small ones and yet regardless of the number that they hold, every bank has just one vote. There’s another violation of the principle of private ownership. Furthermore that vote doesn’t buy them anything. They can’t vote for anything of substance; they cannot vote for their national management which is the most important thing, isn’t it? The board of directors and chairman of the Federal Reserve System are appointed by the President, they’re not elected by the banks that are part of the system, the President does that.”

But, let’s go over a couple of things in this explanation.  Bear in mind what I said earlier, that noone can oversee them.

The Board of Governors are all appointed for 14-year terms by the president and confirmed by congress

This is a red herring.  It assumes that because of some appointment power, that the government has some authority over the bank.  On print that looks great.  In practice, this is nothing more than Napoleon making the Pope crown him.  The “appointees” are hand picked and given to the president and congress.  They wouldn’t dare choose anyone but those who they were told to choose.

  It operates per it’s charter and laws set by congress. it is overseen by congress.

Again, this looks great on paper, but in practice it is just not done.  No congressman can sit in on any federal reserve meeting.  Congress is not advised of the goings on of the meetings.  In fact, congress is told, quite frequently, to shut-up asking about the meetings.  Not only that, but should congress hand the Fed something, congress is well aware that they cannot then ask about the very object they handed to the Fed.

Board members are forbidden by law to have any economic interest in a private bank. (Ref: Title 12 chapter 3 of the U.S. Legal Code). The Board determines monetary policy and provides high level oversight of the branches.

If I sent a simpleton to your house to borrow your sugar, and then fed the simpleton cookies, made from the very sugar I had him borrow, can it be said that the simpleton has not profited from the sugar?  Much is made of this clause that the Fed members cannot have interest in a private bank.  But, what is not said that there are many “non-private” banks.  In fact, as we’ll see, the board holds interest in the Federal Reserve Banks.

Member banks are required to buy shares in their branch. Each bank has one vote. They can vote for 6 of their 9 board members, the other 3 are appointed by the Board of Governors. Though the branches are called non-profit, the member banks get a standard 6% dividend on their shares.

 This might look standard until you valuate how much profit the Fed makes each year.  And, again the board does in fact hold interest in a bank, just not a private one.  Where do the Fed profits come from?  The Federal Reserve Bank makes profits off of the taxpayers of America.

And those shares that the member banks own? Some say there are so many restrictions that it falls short of true ownership

Who cares about the restrictions of ownership if you have 6% of every dollar ever printed in America.  This is just another red herring.  The “restrictions” in question forbid the holder of the shares from being able to sell them.  But, correct me if I am wrong but, who on the planet would be insane enough to sell a share in the monetary system of America?  It is literally like having a share in God, with a restriction that you cannot sell a share in God.  What exactly would you trade a share in God for?  It is literally, by definition, the logical fallacy of false dilemma. This line of “reasoning” is fallacious because if both claims could be false, then it cannot be inferred that one is true because the other is false.

  • I have shares in the Federal Reserve Bank
  • I cannot have a conflict of interest when dealing with taxpayer money, which the bank makes profits off of
  • I cannot trade my shares
  • therefore I must be trustworthy and have absolutely no conflict of interest

This was literally drafted into the article creating the Fed, to confuse people and give a sense of propriety to an organization that is literally pillaging the entire country.

We literally have a private bank that is funneling money through it’s coffers and then doling it out to its friends, its own banks.

If it can be believed, the bank has had people killed that came against it.  Some even say Lincoln and Kennedy were shot by the bank.

Bankers killed Lincoln: In this conspiracy scenario, John Wilkes Booth was the “hit man,” the “hired gun” for the powerful British bankers, the Rothschilds. According to this assassination theory, the Rothschilds had offered loans to the Lincoln administration at very high interest, assuming that the Union had no choice other than to accept their outrageous terms. The frugal and resourceful frontiersman spirit in Lincoln caused him to refuse the Rothschilds’ offer and to acquire the necessary funds elsewhere. Although his refusal only stung their sense of pride and greed, the true reason for their planning his assassination was their knowledge that after the war Lincoln’s policies indicated a mild Reconstruction of the South that would encourage a resumption of agriculture rather than industry. Additional post-war policies destroyed the Rothschilds’ commodity speculations. With Lincoln out of the way, the Rothschilds planned to exploit the weaknesses of the United States and take over its economy.

“…Predictably Lincoln, needing money to finance his war effort, went with his secretary of the treasury to New York to apply for the necessary loans. The money changers wishing the Union to fail offered loans at 24% to 36%. Lincoln declined the offer. An old friend of Lincoln’s, Colonel Dick Taylor of Chicago was put in charge of solving the problem of how to finance the war. His solution is recorded as this. ‘Just get Congress to pass a bill authorising the printing of full legal tender treasury notes… and pay your soldiers with them and go ahead and win your war with them also.’

When Lincoln asked if the people of America would accept the notes Taylor said. ‘The people or anyone else will not have any choice in the matter, if you make them full legal tender. They will have the full sanction of the government and be just as good as any money; as Congress is given that express right by the Constitution.’

Lincoln agreed to try this solution and printed 450 million dollars worth of the new bills using green ink on the back to distinguish them from other notes. “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. The solution worked so well Lincoln was seriously considering adopting this emergency measure as a permanent policy. This would have been great for everyone except the money changers who quickly realised how dangerous this policy would be for them….”

On Kennedy:

On June 4, 1963, a virtually unknown Presidential decree, Executive Order 11110, was signed with the authority to basically strip the Federal Reserve Bank of its power to loan money to the United States Federal Government at interest. With the stroke of a pen, President Kennedy declared that the privately owned Federal Reserve Bank would soon be out of business. The Christian Law Fellowship has exhaustively researched this matter through the Federal Register and Library of Congress. We can now safely conclude that this Executive Order has never been repealed, amended, or superceded by any subsequent Executive Order. In simple terms, it is still valid.

When President John Fitzgerald Kennedy – the author of Profiles in Courage -signed this Order, it returned to the federal government, specifically the Treasury Department, the Constitutional power to create and issue currency -money – without going through the privately owned Federal Reserve Bank. President Kennedy’s Executive Order 11110 [the full text is displayed further below] gave the Treasury Department the explicit authority: “to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury.” This means that for every ounce of silver in the U.S. Treasury’s vault, the government could introduce new money into circulation based on the silver bullion physically held there. As a result, more than $4 billion in United States Notes were brought into circulation in $2 and $5 denominations. $10 and $20 United States Notes were never circulated but were being printed by the Treasury Department when Kennedy was assassinated. It appears obvious that President Kennedy knew the Federal Reserve Notes being used as the purported legal currency were contrary to the Constitution of the United States of America.

“United States Notes” were issued as an interest-free and debt-free currency backed by silver reserves in the U.S. Treasury. We compared a “Federal Reserve Note” issued from the private central bank of the United States (the Federal Reserve Bank a/k/a Federal Reserve System), with a “United States Note” from the U.S. Treasury issued by President Kennedy’s Executive Order. They almost look alike, except one says “Federal Reserve Note” on the top while the other says “United States Note”. Also, the Federal Reserve Note has a green seal and serial number while the United States Note has a red seal and serial number.

President Kennedy was assassinated on November 22, 1963 and the United States Notes he had issued were immediately taken out of circulation. Federal Reserve Notes continued to serve as the legal currency of the nation. According to the United States Secret Service, 99% of all U.S. paper “currency” circulating in 1999 are Federal Reserve Notes.

Kennedy knew that if the silver-backed United States Notes were widely circulated, they would have eliminated the demand for Federal Reserve Notes. This is a very simple matter of economics. The USN was backed by silver and the FRN was not backed by anything of intrinsic value. Executive Order 11110 should have prevented the national debt from reaching its current level (virtually all of the nearly $9 trillion in federal debt has been created since 1963) if LBJ or any subsequent President were to enforce it. It would have almost immediately given the U.S. Government the ability to repay its debt without going to the private Federal Reserve Banks and being charged interest to create new “money”. Executive Order 11110 gave the U.S.A. the ability to, once again, create its own money backed by silver and realm value worth something.

In the intelligence community, there is a saying,  “In the business of covert ops, there are no such things as coincidences.”.  Putting forward a very easy scapegoat for the public to see is the “birdie” the photographer uses to placate the public.  Keep your eyes on the conveniently placed presidential assassin that suddenly appeared on the doorsteps of the FBI.  Pay no attention to the man behind the curtain.  It could not possibly be that these presidents sought to overthrow the banking power houses and ended up dead by their hands.

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AP Says Speculative Bubbles Were the Problem Needs Research (video included)

Youtuber Goes Crazy on The Fed

Youtuber with no college degree, goes crazy in video about AP news: Kohn: Research needed on combating bubbles. While you may not agree with his language or the blunt way he puts it, he is absolutely right. The Fed constantly pretends that they made a mistake and feigns ignorance when their controlled and orchestrated bubbles burst. Yes, the Fed does not ignorantly sit back and a bubble or burst happens. It is designed, orchestrated and pulled off without so much as a stray factor being overlooked or happenstance occurring. Like the youtuber says, wake up.

Secondly, speculation, in a non-corporatism market, has the consequence of being good or bad. So many people are lulled into ignorance and allowing themselves to be played for fools by the media. There is no independent media to begin with. If you let the media define your words for you, you are playing into their hands. So the media says “speculation is bad Billy.” No it is not. Speculation is abundant and is what purchases are made of. If you buy anything, you are speculating. Do you see how detrimental it is to listen to the media? So AP news blames speculation as the cause of the housing BUBBLE.

If you think the housing bubble was caused by speculation, you don’t have a brain worth supplying oxygen to. Donate your cranium to science and kill yourself right now. The single largest cause of the bubble was 0% interest rates, orchestrated by the Fed. You could not have a bubble, if interest rates were 15%. It would never happen.

For the Fed to feign ignorance is the slap in the face of Americans. Let’s reiterate what they are trying to pull here. They are saying they are the central bank of America, who’s job it is to set monetary policy and control commerce across the entire United States and globally, and some how they were not aware of an impending bubble? Somehow they just didn’t see it coming? Somehow they were too stupid to realize it was bursting? Really? I mean really? The highest bank in the land. The lender of last resort. So the highest bank in the land is incapable of noticing a bubble forming.

That begs the question: why is there a Federal Reserve? If Ben Bernanke says he didn’t see it coming, he made a mistake. If Alan Greenspan says he didn’t see the dot com bubble coming, he made a mistake. Why is there a Federal Reserve? This is a private company. It should be out of business. This isn’t even an arm of the government. There is no reason to keep it in business. It should go bankrupt, like the rest of the banks.

Wake Up.

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Walk No Run to the Australian Dollar

Raising Interest Rates is a Good Thing

Investors everywhere are flocking to the land down under. With a 13 week high and the strongest it has been vs the dollar and the euro, the Australian dollar is poised to gather all investors of the world. With a continued policy toward raising interest rates, the Australian Central Bank is set to stabilize its economy, eradicate unemployment and create an attractive environment for investors.

“The trend is still positive for Australia and jobs growth is still there, so interest rates will remain on the way up,” said Jim Vrondas, a manager at the online foreign-exchange dealer OzForex Ltd. in Sydney. “There’s a slight upside bias in the short-term” for Australia’s dollar, he said.

Swaps traders bet yesterday that the Reserve Bank of Australia will raise its benchmark rate by 1.17 percentage point over 12 months, from 89 points on March 5, according to a Credit Suisse AG index. The Reserve Bank of Australia raised the benchmark rate March 2 and Assistant Governor Philip Lowe said March 10 that the nation’s economy will expand at or above its average pace over the next couple of years.

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“Upward pressure on interest-rate expectations in the wake of the decision suggests policy makers expressed more confidence in the economic pick-up than anticipated,” New York-based Todd Elmer and London-based Michael Hart, strategists at Citigroup Inc. wrote in a note to clients yesterday. The bank expects the RBA’s next increase in June with one percentage point of advances by year’s end.

Benchmark interest rates are 4 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits. – Bloomberg

With a continued policy of 0% interest rates, the U.S. federal reserve private bank is determined to destroy all investment in the U.S. No other conclusion can be surmised from such action. While the populous screams for higher interest rates, the fed continuously ignores the clamor and refuses to raise interest rates. Meanwhile no one questions why a central bank should even be able to manipulate a clearly market driven phenomenon. The fed continuously voices its dedication to keeping housing prices overblown at current levels, and not to fall. Yet all of its actions are set to tumble the prices. They are determined to not let the market determine the true value of home prices. But, their stranglehold cannot staunch the inevitable. Everyone refuses to admit that home values are drastically inflated, still even after the slight slump they have taken.

Why are home values even mentioned? The entire U.S. economy and the baby boomer retirement is dependent on home values remaining inflated. While everyone mentions the housing bubble, no one is willing to let the bubble burst. Just like the dot com bubble was not allowed to completely burst or more accurately, the bubble was shifted, to avoid notice, so too is the housing bubble being avoided from true investigation and real discussion.

Tied to the housing bubble is the USD value. It is being dragged, kicking and screaming along with real estate value. Commercial real estate defaults and foreclosures have just begun to surface. They are going to dwarf the housing bubble to such a degree, so as to render it a mere fraction in comparison. If the dollar is tied to it, it will be the end of the fiat currency.

Run to the Australian dollar. Their central bank, while just as corrupt and ponziish as the federal reserve, have at least their countries best interest, somewhat at heart. Perhaps it is their distance from the Rothschilds. Who knows?

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First Central Bank to Raise Interest Rates

Norway Norges Bank Raises Interest Rates

Norway’s central bank on Wednesday raised its key interest rate by 25 basis points to 1.5 percent, becoming the first major European nation to tighten its credit grip since the financial crisis began more than a year ago.

But the world’s top central banks show no inclination to raise rates any time soon. The following discusses the major central banks which may tighten policy next.

It is the first rate hike by Norges Bank since June 2008.

“Developments indicate that it is appropriate to raise the key policy rate now,” Norges Bank Governor Svein Gjedrem said in a statement.

The central bank said in the statement that inflation has been slightly higher than expected while activity in the Norwegian economy has picked up more rapidly than expected.

Economic growth has been stronger than expected, unemployment is low and house prices are swinging higher. The government has a slightly expansionary budget. But the strength of the crown EURNOK= NOK= is a source of concern to the central bank.

“Inflation has been slightly higher than expected. Unemployment is considerably lower than previously projected. The global economy is in a deep downturn, but there are signs of renewed growth. Activity in the Norwegian economy has picked up more rapidly than expected. The Executive Board considered the alternative of increasing the key policy rate at the previous monetary policy meeting. Developments indicate that it is appropriate to raise the key policy rate now,” says Governor Svein Gjedrem.

After Wednesday’s decision, Norges Bank said its main rate would be between 1.25 and 2.25 percent until late March next year. Analysts believe the bank seeks to keep rates around
the mid-point of the range, so they believe there may be one more hike during the next two policy meetings.

The Norwegian central bank’s move follows a surprise interest rate hike on Oct. 6 by the Reserve Bank of Australia, which became the first among the Group of 20 developed and emerging nations to shift from an emergency mode since the crisis.

The Australian Reserve Bank lifted its cash rate to 3.25 percent from 3.00 percent on Oct. 6, becoming the first G20 central bank to raise rates this year.

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Foreign Central Banks Not Buying Anymore Dollars

Compilation of Foreign Central Banks Shows New Dollar Purchases down by 2/3rds

In financial news foreign central banks in their expansion are no longer purchasing dollars. The report showed that new dollar purchases are down by 2/3rds. The other other purchases were the Japanese Yen, which I reported on earlier as their government having a new policy of a strong Yen, and the Euro. This is in sharp contrast to as recently as 10 years ago, where all new purchases were 2/3rds dollars and 1/3rd all other currencies.

Foreign Central Banks Not Buying U.S. Treasuries

Foreign central banks are not selling dollars as yet. However we are selling dollars more now than 10 years ago, so the price of the dollar is falling. Converse to the dollar falling then, the Yen and Euro are getting stronger. Since foreign central banks are not purchasing new dollars, they also will not be buying U.S. treasuries, because they don’t have the dollars needed to invest in them. Therefore they are not recycling the dollars with U.S. treasuries. This means Washington will have far less to spend on stimulus packages; bailouts; deficits; new health care plan. Of course, we have to pay back foreign purchases of dollars with interest. WE DO! Not the government. Remember the government doesn’t have any money.

When Washington can’t get the money from foreign purchases of the dollar they simply will go to Ben Bernanke and the Federal Reserve Bank and run up the deficit even more. Because of this, gold is skyrocketing. Investors see the writing on the wall and are bracing for the inevitable and purchasing gold in mass quantities to hedge against the hyperinflation mushroom cloud that is about to hit from Washington.

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