Ben Bernanke Tries To Convince America That The Federal Reserve Is Good And The Gold Standard Is Bad
Ben Bernanke has decided that he needs to teach all of us why the Federal Reserve is good for America and about why the gold standard is bad. On Tuesday, Bernanke delivered the first of four planned lectures to a group of students at George Washington University. But that lecture was not just for the benefit of those students. Officials at the Fed have long planned for this lecture series to be an opportunity for Bernanke to “educate” the American people about the Federal Reserve. The classroom was absolutely packed with reporters and just about every major news organization is running a story about this first lecture. So the Federal Reserve is definitely getting the publicity that it was hoping for. You can see the slides from the presentation that Bernanke gave to the students right here. It is pretty obvious that one of the primary goals of this first lecture was to attack those that have been critical of the Fed over the past few years. In doing so, Bernanke “stretched” the truth on more than one occasion.
The entire event was staged to make Bernanke and the Federal Reserve look as good as possible. Prior to his arrival, the students gathered for the lecture were actually instructed to applaud Bernanke….
The 30 undergraduates at George Washington University sent up a round of applause. It was, they’d been told beforehand, “appropriate, even encouraged, to politely applaud” Tuesday’s guest lecturer.
But as noted above, this lecture was not for the benefit of those students. A USA Today article even admitted that “addressing the public directly” was one of the real goals of this lecture….
For Bernanke, the GW lectures serve a dual function:
They give him a chance to reprise the role of professor he played for more than two decades, first at Stanford and then at Princeton, where he eventually chaired the economics department.
And they give him a way to expand his mission of demystifying the Fed. As part of that campaign, Bernanke became the first Fed chief to hold regular news conferences and conduct town-hall meetings.
In addressing the public directly, Bernanke has also sought to neutralize attacks on the Fed, some of them from Republican presidential candidates.
So what did Bernanke actually say during the lecture?
Well, you can read all of the slides right here, but the following are some of the highlights….
On page 6 of the presentation, Bernanke makes the following claim….
“A central bank is not an ordinary commercial bank, but a government agency.”
Well, that is quite interesting considering the fact that the Federal Reserve has argued in court that the Federal Reserve Bank of New York is not an agency of the federal government and that the various Federal Reserve banks around the country are private corporations with private funding.
So did the Federal Reserve lie to the court or is Ben Bernanke lying to us?
And what other “agency” of the federal government is owned by private banks?
It is even admitted that the individual member banks own shares of stock in the various Federal Reserve banks on the Federal Reserve website….
The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations–possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.
The Federal Reserve always talks about how it must be “independent” and “above politics”, but when they start getting criticized they always want to seek shelter under the wing of the federal government.
It really is disgusting.
On page 7 of the presentation, the following statement is made….
“All central banks strive for low and stable inflation; most also try to promote stable growth in output and employment.”
Well, on both counts the Federal Reserve has failed miserably.
Right now, if inflation was measured the same way that it was back in 1980, the annual rate of inflation would be more than 10 percent.
And when you take a longer view of things, the inflation that the Federal Reserve has manufactured has been absolutely horrific.
Even using the doctored inflation numbers that the Federal Reserve gives us, the U.S. dollar has still lost 83 percent of its value since 1970.
The truth is that inflation is a “hidden tax” that is constantly destroying the value of every single dollar that you and I hold. Those that attempt to save money for the future or for retirement are deeply penalized under such a system.
As far as employment goes, the total number of workers that are “officially” unemployed in the United States is larger than the entire population of Portugal.
The average duration of unemployment is hovering near an all-time record high and almost every measure of government dependence is at an all-time record high.
So the Federal Reserve is failing at the exact things that Bernanke claims that it is supposed to be doing.
But instead of directly addressing many of the specific criticisms that have been leveled at the Fed, Bernanke instead chose to spend much of his lecture talking about the problems with adopting a gold standard. The following are statements that were pulled directly off of the slides he used during his speech….
-”The gold standard sets the money supply and price level generally with limited central bank intervention.”
-”The strength of a gold standard is its greatest weakness too: Because the money supply is determined by the supply of gold, it cannot be adjusted in response to changing economic conditions.”
-”All countries on the gold standard are forced to maintain fixed exchange rates. As a result, the effects of bad policies in one country can be transmitted to other countries if both are on the gold standard.”
-”If not perfectly credible, a gold standard is subject to speculative attack and ultimate collapse as people try to exchange paper money for gold.”
-”The gold standard did not prevent frequent financial panics.”
-”Although the gold standard promoted price stability over the very long run, over the medium run it sometimes caused periods of inflation and deflation.”
-”In the second half of the 19th century, a global shortage of gold reduced the U.S. money supply and caused deflation (falling prices). Farmers were squeezed between declining prices for crops and the fixed dollar payments for their mortgages and other debts.”
Bernanke spent more time on the gold standard during his speech than on anything else. At one point during the lecture, Bernanke made the following statement….
“To have a gold standard, you have to go to South Africa or someplace and dig up tons of gold and move it to New York and put it in the basement of the Federal Reserve Bank of New York and that’s a lot of effort and work”
Bernanke even blamed the gold standard for the Great Depression. On a slide entitled “Monetary Policy in the Great Depression”, Bernanke made the following claims….
•The Fed’s tight monetary policy led to sharply falling prices and steep declines in output and employment.
•The effects of policy errors here and abroad were transmitted globally through the gold standard.
•The Fed kept money tight in part because it wanted to preserve the gold standard. When FDR abandoned the gold standard in 1933, monetary policy became less tight and deflation stopped.
Bernanke seems to want to frame the debate over monetary policy is such a way that the American people are given only two alternative systems to consider: the Federal Reserve and a gold standard.
But the truth is that there are a vast array of both “hard money” and “soft money” systems that would not include a central bank or a gold standard at all.
So the truth is that the American people would have many different systems to choose from if they wanted to shut down the Federal Reserve and set up something new.
In the past the U.S. government has issued debt-free money and it could certainly do so again.
But in his lecture, Bernanke did not even mention how the Federal Reserve creates money or how whenever new money is created more debt is created.
Under the Federal Reserve system, the money supply is designed to continually increase, and whenever more money is created more debt is also created.
In a previous article I discussed how more money is created on the federal level….
For example, whenever the U.S. government wants to spend more money than it takes in (which happens constantly), it has to go ask the Federal Reserve for it. The federal government gives U.S. Treasury bonds to the Federal Reserve, and the Federal Reserve gives the U.S. government “Federal Reserve Notes” in return. Usually this is just done electronically.
So where does the Federal Reserve get the Federal Reserve Notes?
It just creates them out of thin air.
Wouldn’t you like to be able to create money out of thin air?
Instead of issuing money directly, the U.S. government lets the Federal Reserve create it out of thin air and then the U.S. government borrows it.
Talk about stupid.
The designers of the Federal Reserve system intended to trap the U.S. government in a debt spiral that would expand perpetually.
So has their design worked?
Well, just look at the chart below….
Read More : theeconomiccollapseblog
I wouldn’t put too much stock in Bernanke’s protestation of gold. It’s like a wolf complaining about the taste of mutton. Commodity backed currencies make money worth more. They also make debts worth more. The 1%, holding about 80% of the world’s debt, would reap exponetially more under a gold standard than our current fiat system. However insufferable hyperinflation is, a deflationary depression would be much worse. Imagine Greece having to pay their fraudulent debts off in gold. The country would be plundered overnight.
Interest in the real issue, not whether the currency is gold or fiat. That private central banks are allowed to charge for something they do not possess constitutes the debt matrix into which the world is trapped.
Don’t expect any change in the U.S. as the only alterantive offered the to globalist left and right is the goldbug Ron Paul. The Bilderburgers, who hate gold so much according to Bernanke, had Peter Thiel donate 2.7 million to his presidential campaign. And isn’t it very strange that Alex Jones, who covers the Bilderburgers extensively, has never once reported this fact. It appears he is allowed to tell the truth so long as he leads the sheep to shepards that will institutionally change nothing.
The gold standard is a bad idea, as is the so called Federal Reserve. The foolish idea of backing money with commodities with intrinsic value, was added to the US constitution last minute by a preacher. It was a dumb idea then, it is a dumber idea now.
Look back through history. Whenever “money” was backed by gold, or made from gold; wealth was concentrated into the hands of the few.
Bernanke is clearly a shill and liar and is twisting the truth that the gold standard is a bad idea, for the NWO twisted plan.
I further must point out something that most truthers fail to understand; and that is the proper meaning of fiat.
Fiat money is the most advanced form of money, and is exactly what we need. What we don’t want is fiat money that is debt based and or privately owned/controlled.
REAL money is a legal fiat not a commodity.
Please stop using the word fiat as a bad word, and linking its meaning to debt based/paper/private control.
Fiat money is a very good thing, when it is defined and created and employed properly.
Go to monetary.org to learn what REAL money is, and how to create it.
Well said mark. Most truthers are bamboozled by the austrian school of economics which was created by the illuminati as a dialectic to communism. http://www.henrymakow.com/cgi-bin/mt/mt-search.cgi?search=volker&IncludeBlogs=1&limit=20 The austrians promote deregulation to make markets free for the monopolistic and predatory rent seeking transnational corps and banks, not for the economic rights for the populace as described in Adam Smith’s “Wealth of Nations”. Look at “Ron Paul’s Restore America” budget proposal and you will see the interests of the 1% ruthlessly enforced.
The illuminati funded historians have conveniently covered up the fact that the revoutionary war in America started not because the king raised their taxes, but rather that he expected them to pay it in gold. The conscription tax hit the colonists with a deflationary austerity. Also, the only reason colonial script, paper fiat issued by the colonial govt without interest, failed is because British agents conterfeited the notes and flooded the market with them causing a hyperinflationary crash.
Ellen Brown’s book, “Web of Debt”, and Bill Still book, “No More National Debt”, in addtion to his documentaries: “Money Masters” and “The Secret of Oz” are also excellent sources for true history of banking and what real reforms should be made.
Still2012.com
for an analysis of how the Ponzi scheme Fed conceals trilliion in profit from the Treasury auctions via the FRBNY handling of the funds, go to http://www.scribd.com/doc/49040689. A lesson in economics like no other.
Bang on Pat.
You have an excellent grasp of the nature of real money, Pat.
I recommend we keep our explanations as simple as possible. Everyone needs to understand what real money is. Perhaps 99% of the population are dumbed down to the point of not understanding money at all. They can vote too. They need to also understand money. Most people can’t even imagine what life on Earth would be like if we had real money.
You are correct about Ron Paul. He has been “educated” by the Austrian school of economics, which is ignorant of the true nature and history of money; or! this school is, as you point out, but I will make simple, full of liars, thieves and shills.
I do not dislike Ron Paul. He is the only good choice running for leader of the Republican party. He is blind though to the mistakes he makes regarding the nature and history of money…at least I hope this is due to blindness.
Also check out the work of Bill Abrams, and Dennis Kucinich’s bill HR 2990. If HR 2990 were to pass, it would fix America. I am amazed Dennis has not been murdered by the establishment for introducing HR 2990.
We all need to understand what real money is and its true history, and then we all must create real money world wide. You do not live in a sovereign nation if your country “borrows” “money” from private banks.
Real money is THE KEY to freedom. The true nature and history of money is the greatest issue of the entire past age and further back, likely will be, going into the next age. Lets make the next age a good one and fix this now.
The Fed funds all of the globalist endeavors as it debilitates all peoples and nations. If you don’t abolish usurous central private banking and establish a national bank, then nomatter what else you try to do, you will have not changed anything. Ron Paul in this crucial respect is no different than any of the other globalist actors on the stage.
There is a canidate, however, that offers a proper solution to this important issue. His name is Bill Still and he is seeking the nomination of president in the libertarian party. He needs grassroot support because he will get none of the daily media attention that the Paul supporters disingenuosly claim is being denied Ron Paul.
Still2012.com
“How does the Fed profit from deficit spending:?” you may ask.
Every dollar of deficit spending is a dollar of profit for the Federal Reserve. The (unreported) profit is from the auctions of Treasury securities that are handled exclusively by the FRBNY. Disbursements are not a matter of public records.
The Fed had $1.4 trillion profit hidden from the government last year. Some of that profit, distributed among the (unknown) owners of the Fed’s BOG, finds its way into campaign contributions.
If the money from auctioning of securities went to the government, there would be no inflation nor would there be any increase in the national debt. That is the way it occurs with the securities that are perpetually rolled over.
The profit of the Fed legally belongs to the government. It is a crime to hide money from the government.
Ref. http://www.scribd.com/doc/49040689 RIP OFF BY THE FED RESERVE
The Federal Reserve Act 1913 permits this unconstitional lack of congressional oversight and accountability. The Supreme courts should have struck down this law decades ago, but alas the courts are their servants as well.
The 1913 legislation does not authorize the above actions. Section 7, paragraphs 1and 2 specifically declare: “[A]ll the net earnings (of Federal Reserve banks] shall be paid to the United States as a franchise tax…(and) be applied to the reduction of the outstanding bonded indebtedness of the United States…” Ref. 12 USC section 289, 290. The profit from the auctions of Treasury securities from deficit spending yields more than one trillion dollars per year in profit hidden within the accounting books of the FRBNY. Those records are not mentioned in the ANNUAL REPORT to Congress nor are any records available as to where disbursements are distributed and for what reason. .
Congress still has total control of the Fed if they wanted to exercise it. They could rescind or amend Title 12, sections 221 thru 522 tomorrow. The banks of New York are the best sources of PAC funds that secure protection for the Fed.
Nor does Title 31, section 714 exempt Congress from ordering the GAO to make an audit of the Fed IMHO.
Ref. http://www.scribd.com/doc/49040689
Well, my point rests on the initial violation of article 1 section 8 of the constitution. It’s unconstitutional to allow a private bank to print our currency and the supreme courts should have struck the law down and abolished the Fed.
Subsection (b) of section 714 of title 31, United States Code does prohibit by law the audit of the Federal reserve by the GAO or any other auditing party not affiliated with the Fed. http://us-code.vlex.com/vid/audit-examination-comptroller-currency-19219704 This is why Ben Bernake could refuse to answer any of Congressman Grayson’s questions http://www.factoverfiction.com/article/2464 or why Ron Paul tried to introduce a bill, HR 1207, in order to amend this part of the code to allow for a GAO audit:
“To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.
1. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “Federal Reserve Transparency Act of 2009″.
SEC. 2. AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.
(a) IN GENERAL. – Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after “shall audit an agency” and inserting a period.
(b) AUDIT. – Section 714 of title 31, United States Code, is amended by adding at the end the following new subsection:
“(e) AUDIT AND REPORT OF THE FEDERAL RESERVE SYSTEM. -
“(1) IN GENERAL. – The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010.
“(2) REPORT -
“(A) REQUIRED. – A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each sub-committee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.
“(B) CONTENTS. – The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.”.
H.R. 1207 failed; and although the Sanders/Grayson amendment, passed its ability to compell the Fed to comply with a GAO audit was destroyed by Sanders’ last minute alteration.
I have to wonder why congress, after having allowed the a private corp to counterfeit our money supply at compound interest, would ever be concerned about enforcement of laws regarding the national debt in the first place. They of all people know that to abolish the national debt would mean abolishing our money supply, and their budgets, in toto. And that might just be the principle on it. In for a penny, in for a pound as they say. Better to leave enforcement to campaign speeches and keep rolling that debt over.
While the Federal Banking Agency Audit Act fo 1978 puts the Fed under the Authority of the GAO it is restricted in these significant ways necessitating the forgoing legislation by Sanders and Paul:
The Government Accounting Office does not have complete access to all aspects of the Federal Reserve System. The law excludes the following areas from GAO inspections (31 USCA §714):
(1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
(2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, open market operations;
(3) transactions made under the direction of the Federal Open Market Committee; or
(4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to items.
http://www.law.cornell.edu/uscode/text/31/714
Pat, we agree in principal. The Fed is an abomination on society that is predestined by its design to destroy society and transfer all wealth to the owners of the Fed. Ref. RIP OFF BY THE FED. We have differences on how terminology of their Ponzi scam applies to their criminal acts.
You state the Fed is a private bank. The courts have declared in several adjudications that the 12 FR banks are private banks with shareholders FOR THE ISSUES BEFORE THE COURT. In my view, the 12 banks are not the issue. It is the ownership of the BOG that is important. The BOG has total supervisory and regulatory control of the 12 banks and maintains the cloak of a government agency. I believe we both suspect the BOG is privately owned by Wall Street banks and ultimately the Rothschild family.
The Fed does not print currency. Printing of FR Notes is done by the US Treasury and sold to the Fed. The cost of a $100 FRN costs the Fed less than ten cents. One dollar FRN cost the Fed less than five cents.
Technically, FR Notes are not currency; they are a legal tender (granted, the fed passes them off as currency). A legal tender is something that is required by law to be accepted for a contract agreed to in another form. You make a contract to purchase an automobile for XXX dollars; the seller must accept the legal tender (identified in congressional hearings as a debt obligation of the Fed denominated in dollars).
The Constitution establishes that “no state shall …make any Thing but gold or silver Coin a Tender in Payment of Debts.” Article 1, section 10. Unfortunately, it does not prohibit the US government from making paper a tender for debts. Perhaps the founding fathers should have written that no state shall accept anything but gold or silver coin as payment for debt or taxes.
You have reprinted the four paragraphs of Title 31, section 714 claimed by the Fed to prevent an audit of the Fed. I do not find any of the provisions to relate to record keeping of the auction funds wherein the BOG has hidden trillions of dollars owed to the government. Ref. RIP OFF It would appear Congress could immediately order the GAO to make an audit of those accounts.
The financial records of the FRBNY can even be demanded by a private citizen via FOIA. Ref. Fox News Network v BOG of FR, 601 F3d 158 (2010, 2nd Cir). But Congress has no access to them? Ridiculous.
The Fed does make electronic book entry money; it does not print anything.
Ever wonder why Canada came out of the Great Depression(part 1) in better shape and faster, than both the US and British Isles?
It was thanks to one man: Gerald G. McGeer, K.C.
Barrister and Solicitor.
http://www.yamaguchy.com/library/mcgeer/mcgeer.html
Copy the web page; just in case.
If you are curious enough to read through this; take note of what Gerald G. McGeer thought of the gold standard way back then.
Canada had a decent monetary system due to the creations of the Bank of Canada Act and the Central Bank of Canada.
Then, as usual, along came a spider(money manipulators). Early 1970′s (74 I think), the money masters had bought enough politicians, the public was ignorant enough, and borrowing from private banks began again. Inflation also began again. Recession in the 1980′s. Canadian dollar is now as worthless as the American dollar.
Pat wrote above that:
“Most truthers are bamboozled by the austrian school of economics”
For those that want a great example of this bamboozlement, take a look at this”
http://www.roguegovernment.com/
Lee Rogers has had that “article” (Ben Bernanke Makes Insane Comments On Gold) at the top of his web page since July 2011.
I wrote to Lee several months ago, to explain to him, that he is ignorant of the nature and history of money, and that his comments are not only wrong but backwards, and Bernanke, A-hole that he is, was correct to say that gold is not money. I was as polite as I could be, for a person who tends to be brutally honest.
Lee responded like a complete ass, so I made sure my emails went to the other Oracle Broadcasting owners as well. I did my best to be polite as I really wanted Lee to understand, so as to not be further dumbing down his listeners/readers.
I gave Lee, and nearly everyone at Oracle, links to and attached documents for them to get a proper education about the history and nature of money.
As you can see from his web site, the article remains at the top! Why? Why this article? I guess to show support for Ron Paul and the gold sellers, who both are helping to confuse money with commodities, along with the Austrian school and the Libertarians “educated” by this same school of ignorance.
I must point out though, that both talk show hosts, Doug Owen and Mike Chambers, also on Oracle, are beginning to understand the true nature of money.
Pat is correct, most truthers have been bamboozled by the Austrian school of Ignorance.
Even truth seekers and freethinkers, who are quite brilliant by times, have been fooled by generations of lies and omissions about real money; and by living so many generations under the use of corrupt monetary systems.
Real money is actually quite a simple thing, and yet most can not grasp it.
I will pass on something else about “money”. The lust for money is NOT the root of all evil. The lust to own and control money and have more than your share without earning it, is the root of evil.
Money is a physical representative of energy. Our productive energy, our work, our applied skills, creations, blood sweat and tears.
A criminal monetary system, like what is the norm today, is an energy that runs throughout all of society, causing lust for money, theft, strife, a fight for survival, “it’s just business”, kind of thinking. A corrupt money corrupts all of us to some degree. A corrupt monetary system creates a lot of poor people and a few filthy rich bastards.
On the other hand, a real monetary system, of the people, by the people, creates a very different society, where generosity is common, abundance is common, doing what is right is common, earning your living is easy and common, poverty is nearly unheard of. The wealth remains in the hands of the people, and the super rich are no more.
This is not socialism nor a utopia I am describing, but the result of living with real money instead of what we now have. This is how we could have been living for thousands of years if not for the money manipulators. This is how real money works!….or would if it existed.
This is also why most people can not imagine what real money is.
@olde rep
While it is true that an individual citizen can initiate a FOIA request against the BOG http://www.federalreserve.gov/foia/about_foia.htm , there are nine exemptions regarding this information , that substantially restrict the type of information issued. http://www.federalreserve.gov/foia/exemptions.htm These exemptions, as elaborated upon by the the Fed itself in the itallic text, can be used to arbitrarily censor any information requested. But yes, you will get a response to your FOIA.
So without new legislation or amendments, the federal banking act of 1978 and the above restrictions bar any meaningful audit of the BOG.
Everyone here understands that the treasury physically “prints” the FRNs and that come into existence at the Fed as digital entries.