THE GLOBAL STOCK CRASH!

Markets around the world have been in serious decline most of this year. In fact the Financial Times reported in its weekend issue that on a global scale the markets are now down the most in 26 years!
Inflation rates are on the rise everywhere, including China. But China can’t engage a tight monetary policy to fight inflation, because that would likely lead to a flight of hot money out of the dollar and other weaker currencies, thus leading to a strong Chinese currency which would hurt their huge exports. It could also lead to a crash of the dollar. If/when that happens, there would be a hellish gnashing of teeth heard around the globe, as wealth held in the form of dollars will be quickly vaporized.
The Chinese and other countries know the day of dollar doom is coming which is why the dollar is continuing to come under pressure.
Americans for the most part are not yet aware of the dollar’s fate and how that is going to devastate their standard of living. But there is a growing sense among foreigners that they don’t want to get paid or hold dollars lest they be holding them when the plunge in the dollar’s exchange rate leads toward zero value for the Greenback. None of the major exporting nations want the dollar to crash just yet. They want more time to trade out of dollars and into something of value if they can before the final day of reckoning hits America and its fraudulent currency.
It seems to your editor that we are approaching a perilous crossroads in economic history, with our decadent, consumer oriented, live-for-today culture on the verge of collapse. We have basically “shot our wad,” as they say, and now we are going to have to pay for our orgies. We blame no one more for our condition than the father of economic lies, John Maynard Keynes, who convinced the West that we could eat our cake and have it too. No need to save to build for a better tomorrow. You need only deficit spend and print money to fund your expenditures. According to Keynes, there was no need to worry about an infinite amount of money supply leading to infinite price increases. If only we got rid off the gold standard, we would never need to suffer any more recessions and depressions.
It is amazing how many Ph.D. economists have swallowed Keynes’s lies, hook, line, and sinker. Of course, most of the high-profile economists have had their careers advanced by selling these lies because they have benefited the Wall Street and Washington establishment. They have used Keynesian lies to deceive the public into thinking that Government can give the public welfare and wars without a price. If only the public could connect the dots between welfare and wars on the one hand and $140 oil on the other, Keynesian lies would be exposed and we would at least have a chance to return to free market, Austrian economics and limited government once again. In other words, the west could become strong and more free again if it went back to work and accepted reality rather than falsehoods.
To be sure, the Keynesian lie has worked well for quite a while. It has worked especially well for the banks that own the Federal Reserve Bank and for those who put it in place to socialize wealth while privatizing profits. But given the rising global economic imbalances, one wonders how long it can continue when we see a growing number of countries facing the same kind of problem Ben Bernanke is facing. Globally, inflation is on the rise—big time. That should be dealt with by a restrictive monetary policy by all central banks in those countries where inflation is on the rise but it is just too painful to accept reality. As we are always noting, debt is the raw material from which money is created in a fiat (as opposed to asset-backed) currency. And so, with the money supply growing exponentially debt is growing even faster than income. That is being dealt with not by policies that would force us to live within our means and rebalance our accounts. Rather it is being dealt with by a faster and faster creation of money, which in turn is resulting in a faster and faster creation of debt. In other words, what is believed to be the cure is actually the problem and making the situation worse over the longer term.
The upcoming monthly issue of J Taylor’s Gold & Technology Stocks newsletter will feature an interview with Alex Macdougall, who is a student of the German hyperinflation experience that culminated in 1923. Alex recently spoke at the Spring CMRE meeting. He drew parallels between the German experience starting in 1870 under Otto von Bismarck, and the experience of the U.S. starting in the early 1900s, when the U.S. began its socialistic policies and inserted the Federal Reserve to fund socialism.
June 28, 2008
Jay Taylor, Editor of J Taylor's Gold & Technology Stockswww.miningstocks.com

More Power for the Fed as the Central Bank Cooks the Books

Mercury news is reporting Administration calls for giving Fed more powers .
Treasury Secretary Henry Paulson says the government must move quickly to give the Federal Reserve more powers to regulate the financial system. Paulson said today that the central bank's powers should be expanded in the wake of the near collapse earlier this year of Bear Stearns, the giant Wall Street investment firm.

He said there was a need to consider quickly how to give the Fed the power it needs to obtain information from investment banks and the responsibility to intervene to protect the overall financial system. His comments were provided by the Treasury Department as excerpts from a speech he was to give later in the day.

Fed At Fault

This is of course as disgusting as it was predictable. It is all in accordance with the Fed Uncertainty Principle .

Uncertainty Principle Corollary Number Two: The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.

Notice the need to move "quickly". The reason to move quickly in this case is that Bush's days are numbered. Our next president, Obama, may very well have different ideas about what role the Fed should play. My position is clear: Want To Fix The Fed? Get Rid Of It .

Fed Is Cooking The Books

Please consider Fed's Bear Stearns Books Look Prime for Cooking .

Flip through the footnotes to the Fed's latest annual report, and you'll come across an open secret. The Fed doesn't follow normal accounting rules, as promulgated by any of the major standard-setting boards. Rather, the Fed writes its own, in a document called the Financial Accounting Manual for Federal Reserve Banks.

If you ever wanted to design an accounting regime to help a bank cook its books, the Fed's would be perfect. This doesn't exactly inspire faith in the U.S. financial system, at a time when a good example might help a lot.

Imagine if there were no rules specifying when a bank must bring an Enron-style special-purpose entity onto its own balance sheet. The Fed's accounting manual has none. Now picture an accounting system where a bank never had to recognize losses on any securities it holds, as long as it continues holding them. That, too, is the Fed's policy.

JP Morgan Chase & Co., which completed its purchase of Bear Stearns this month, will lend the Delaware entity $1 billion and absorb the first $1 billion of any losses. The Fed is on the hook for the rest. The central bank has hired an outside company, Black Rock Inc., to manage the sale of the assets over the next 10 years. The proceeds will go back to the Fed and then, if anything is left over, to JP Morgan after the Fed is paid.

If the Fed were a normal bank, it probably would have to put the Delaware special-purpose entity's assets and liabilities on its own balance sheet, under the Financial Accounting Standards Board's rules. The reason is that the Fed will bear most of the risk of losses. Under the Fed's 161-page accounting manual, however, there's no such requirement. That's because the manual doesn't have any rules on the subject. The Fed hasn't said yet what it will do.

Are we in a banking crisis? You bet we are, the worst one since the great depression. And the root cause of that crisis is the Fed's micro management of interest rates in conjunction with Bush wasting trillions of dollars we do not have in a senseless and in my opinion illegal war in Iraq, and Congress (both parties) that have no sense of fiscal responsibility.

Now instead of eliminating the problem, the screams are getting louder and louder to expand the powers of those causing the problem.

Ron Paul would fix this in a flash. It would be painful, but it would be short and painful. Giving the Fed more powers is guaranteed to do one thing: make the recovery process long and painful and worse.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Unfolding Financial Meltdown on Wall Street

What’s The Difference Between Lehman Brothers & Bear Stearns? Lehman’s CEO Sits On the Board Of The NY Fed


by Dr. Ellen Brown


An earlier article by this author ("The Secret Bailout of JP Morgan") summarized evidence presented by John Olagues, an expert in options trading, suggesting that JPMorgan, far from "rescuing" Bear Stearns, was actually its nemesis.1 The faltering investment bank was brought down, not by "rumors," but by insider trading based on a plan drawn up much earlier. The deal was a lucrative one for JPM, handing the Wall Street megabank $55 billion in loans from the Federal Reserve (meaning ultimately the U.S. taxpayer). So how did JPM get away with it? Olagues notes the highly suspicious fact that JPM’s CEO James Dimon sits on the Board of the New York Federal Reserve.

In his latest post, Olagues discusses the fate of Lehman Brothers, the nation’s fourth-largest investment bank and the next faltering bank expected to fail.2 Unlike Bear Stearns, which got decimated by the JPM buyout using Federal Reserve money, Lehman Brothers is probably in line for a massive bailout from the Fed. At least, that’s what its CEO Richard Fuld seems to believe. The June 4, 2008 Financial Times of London quoted him as stating, "The Federal Reserve’s decision earlier this year to lend directly to investment banks should take questions about Lehman’s liquidity off the table." Whether Lehman can come up with the "liquidity" to meet its debts is no longer an issue, because it expects to be feeding at the trough of the Federal Reserve, just as JPM did when it bought Bear Stearns at bargain-basement prices. The difference between the two "bailouts" is that Lehman Brothers, unlike Bear Stearns, will actually get the money. Why is Fuld so confident of this rescue operation? Olagues notes that Fuld, like Dimon (and unlike Bear CEO Alan Schwartz), sits on the Board of the New York Federal Reserve.

A conflict of interest? It certainly looks like it. Indeed, Olagues points to a statute defining this sort of self-dealing as a criminal offense. 18 U.S.C. Chapter 11, Section 208, makes it a felony punishable by up to 5 five years in prison for members of the Board of Directors of a Federal Reserve Bank to make decisions that benefit their own financial interests. That would undoubtedly apply here:

"Fuld, at last count, owns 1.9 million shares of Lehman, 600,000 restricted stock units and 900,000 executive stock options . . . . Although Mr. Fuld sold over $320,000,000 worth of stock at near all time highs in 2006 and 2007, received through the premature exercise of his stock options, he still has value in his present holdings of approximately $100,000,000."

Likewise, says Olagues, "James Dimon holds almost 3 million shares of J.P. Morgan stock worth over $120 million with taxes already paid and executive stock options equal in my estimate of another $70 million. His dispositions of stock equaled $140 million over the past few years." Olagues adds:

"Fuld, like Jamie Dimon, was at the luncheon on March 11, 2008 with Bernanke, Rubin, CEO of Citigroup, Geithner, President of the New York FED, Thain of Merrill Lynch, and Schwarzman. Some claim that the meeting was about Bear Stearns and how to handle the situation."

Needless to say, Bear CEO Schwartz was not invited to the luncheon. "Lehman Bros. is one of the original stock holders of the New York Federal Reserve Bank," Olagues observes. "Bear Stears does not now have any ownership in the FED banks."

The luncheon was held two days before the April 14 collapse of Bear Stearns stock that led to the bank’s demise. If the luncheon attendees were indeed discussing the Bear problem on April 11, testimony before the Senate Banking Committee in which the principals said they first heard of the problem on the evening of the thirteenth, says Olagues, was "less than truthful."

The evidence at least warrants an investigation, but who is going to hold these self-dealing Federal Reserve Board members to account? In a March 27 radio broadcast noted in The New York Post of the same day, Senator Christopher Dodd pointed out the conflict of interest and said it needed to be examined; but no mention was made of it at the April 4 Senate hearings. Why not? Olagues suggests he had gotten his marching orders by then from a major campaign contributor. New York Governor Eliot Spitzer, the former thorn in the side of the Wall Street bankers, has been summarily disposed of; and under the latest proposal of U.S. Treasury Secretary Hank Paulson, the Federal Reserve itself will soon become the chief overseer and regulator of the banks. The Federal Reserve will regulate the Federal Reserve Boards with their litany of private bank CEOs, a clear case of the fox guarding the henhouse.

So who is left to bring the banks to task? That question will be addressed in my next article. Stay tuned . . . .

Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and "the money trust." She shows how this private cartel has usurped the power to create money from the people themselves and how we the people can get it back. Her eleven books include Forbidden Medicine and Nature's Pharmacy (co-authored with Dr. Lynne Walker and selling 285,000 copies). See www.ellenbrown.com and www.webofdebt.com.


Ellen Brown is a frequent contributor to Global Research. Global Research Articles by Ellen Brown

Time to End "Bernanke Panky?"

Deplore as he must the current minor Internet buzz about abolishing the Federal Reserve Board or impeaching its leaders, Fed Chairman Ben Bernanke must have a grudging historical sense that 75 years ago, such chastisement might have been appropriate.

Back in 2002, Bernanke, then a Fed Board member, told a Chicago meeting that the group's honoree, octogenarian economist Milton Friedman, had been correct in blaming the Fed for the Great Depression. "You're right," Bernanke told Friedman and the rest of the audience. "We [the FRB] did it. We're very sorry. But thanks to you [Friedman's analyses and teachings], we won't do it again."

So, if recent Fed policies of blowing monetary bubbles and then bailing out the most reckless Wall Street institutions in fact "do it again," albeit through a different economics, is Bernanke ready for a new round of 1932-style talk about abolishing the Fed or impeaching its leaders?

Perhaps he should be. At least three aspects of Bernanke's Fed chairmanship over the last two years -- the J.P. Morgan Chase-Bear Stearns bail-out, his subservience to Treasury Secretary Henry Paulson, and the Fed's decision in 2006 to stop publishing M3 money supply data that mocked its insistence on "anchored" inflation -- have generated major controversy.

Extra-legal Bernanke Behavior in the March J.P. Morgan Chase - Bear Stearns Bailout: Former Fed chairman Paul Volcker, a recognized pillar of U.S. finance, has opined that the Fed took "actions that extend to the very edge of its lawful and implied powers, transcending in the process certain long-embedded principles and practices." Moreover, the statute under which Bernanke purported to act required affirmative votes from five Fed Board members, and Bernanke procured only four. Other critics contend that the bail-out was really on behalf of J.P. Morgan, which could have been pulled down by the impact on its holdings of a Bear failure. In this view, the $29 billion loaned to finance the deal was legally a usurpation of Congressional appropriations power.

Bernanke and the President's Working Group on Financial Markets: Since this outfit, CIA-like in its official but also clandestine nature was set up in 1988, rumor has made it a backstage and unauthorized financial markets participant in crisis periods. The March episode may well be another example. Treasury Secretary Paulson is the Working Group's big capo in Washington, not Bernanke. Indeed, bipartisan leaders of the Senate Finance Committee expressed open concern that Paulson had told Bernanke what to do. Furthermore, although Bernanke testified to Congress that he didn't know about the grave Bear Stearns financial situation until March 13, it turns out, from Freedom of Information Act disclosures, that he may well have known. On March 11, Bernanke and another bail-out architect, New York Fed President Tim Geithner, lunched with representatives of every big Wall Street firm except Bear Stearns. The financial website Monkeybusinessblog.com assumes that Bear people were not on hand because it was their own situation being discussed.

Bernanke, Inflation and the Suppression of M3 Money Supply Data: In November 2005, several weeks after Bernanke was named as chairman, the Fed announced that publication of the broad "M3" money supply data would be discontinued in March 2006 because it was "duplicative." It wasn't, because the M3 measurement is much broader than the other two yardsticks (M1 and M2). More importantly, over the last two years, M3 has ballooned to a 15-16 percent annual growth rate. These no longer official computations mocked Bernanke's pretenses that inflation was low and under control. Indeed, the investment firm of Stifel Nicolaus just published charts showing how closely the 2001-2008 oil price surge has related to the galloping growth in M3. Here, too, the legal question becomes: What did Bernanke know about inflation and the suppression of M3 and what was his personal involvement?

Given that the embattled chairman has the big guns in Washington and a grateful Wall Street on his side, he probably has little to fear. For example, House Financial Services Committee Chairman Barney Frank, a leading pro-bailout Democrat, told the Wall Street Journal that "I don't think that changing the agenda of the Federal Reserve is going to be high on any new president's agenda. I think people think Bernanke is doing well."

People as in "the American people" or people as in big Democratic and Republican donors? One must assume the latter. Right after the Bear gambit, Britain's Financial Times reported that U.S. poll data showed the public opposing bank bail-outs by 4:1 ("U.S. Home-owner Bail-out Hits Resistance," Financial Times, April 2).

Herein lies the warning. Search the Internet for a conjunction of Bernanke or the Federal Reserve with impeachment, you don't get much beyond one or two quirky financiers and the official website of the maverick Republican presidential contender, Congressman Ron Paul of Texas, who favors U.S. withdrawal from Iraq and abolition of the Federal Reserve Board. Paul has no use for either anointed GOP nominee John McCain or the party establishment. However, he does have support from a tenth or so of the Republican electorate. And should Paul signal his followers to back this year's presumed Libertarian presidential nominee, former Georgia Congressman Bob Barr, some pundits think the latter could take 2-3 percent of the November vote, siphoning off enough disgruntled conservatives to beat McCain.

Could the impeachment of Bernanke become a 2008 issue? I doubt it. Congressman Paul, as a member of the House Financial Services, probably knows that back in 1932, Republican Congressman Louis McFadden of Pennsylvania, a longtime Chairman of the House Banking Committee, made a fool of himself with a resolution indicting the Federal Reserve Board for its actions, and then later switched focus to impeachment. The hidden irony is that Bernanke, philosophically, must empathize with frustration with early 1930s monetary policy.

In 2008, however, a more restrained critique could be effective. If Paul and Barr de-emphasize the fringe Libertarian stuff -- marijuana legalization and such like -- and go straight for the jugular of Iraq bungling and its effect on oil prices, along with Federal Reserve misbehavior, they might have a shot at that 2-3 percent. Moreover, even if Barr drew only 1.4 percent, say, on a national basis, he could do better in five swing states -- Ohio, Florida, Colorado, Nevada and New Mexico -- where sensitivity to the housing bubble and mismanaged mortgage crisis runs especially high.

Volcker, the grand old man of U.S. monetary policy, has told audiences that he doesn't believe that incumbent Fed chairman Bernanke will be reappointed by the next president. He certainly won't be if the integrity of his behavior in office becomes a significant 2008 campaign issue.

$150 Billion and Counting: Federal Reserve Announces Another Increase In Its Treasury Auction Facility

Robert Wegner

The housing finance bailout continues. There’s obviously still quite a bit of junk paper out there. And the Fed is going to spread money everywhere, the U.S., the EU and Switzerland, in response.

From the Fed’s statement, today:

The Fed announced today an increase in the amounts auctioned to eligible depository institutions under its biweekly Term Auction Facility (TAF) from $50 billion to $75 billion, beginning with the auction on May 5. This increase will bring the amounts outstanding under the TAF to $150 billion.

Here’s the global angle to the junk buying binge:.

In conjunction with the increase in the size of the TAF, the Federal Open Market Committee has authorized further increases in its existing temporary reciprocal currency arrangements with the European Central Bank (ECB) and the Swiss National Bank (SNB). These arrangements will now provide dollars in amounts of up to $50 billion and $12 billion to the ECB and the SNB, respectively, representing increases of $20 billion and $6 billion. The FOMC extended the term of these reciprocal currency arrangements through January 30, 2009.

And the Fed is going to allow even uglier junk to be used as collateral:

The FOMC authorized an expansion of the collateral that can be pledged in the Federal Reserve’s Schedule 2 Term Securities Lending Facility (TSLF) auctions.

For Currency Traders, an important update from FXI

FXI Update

*A CLEAR AND PRESENT DANGER*

Subject: A Clear and Present Danger


I received the following from an extremely well informed person. This explains the situation the Federal Reserve and its member banks are in at this exact time...
It explains how we got here and what needs to be done to free ourselves of the bankers who have illegally run our money system for most of the last century.
This is the most important article you will read. I ask that you send it to everyone you know. It explains everything clearly and simply. You don't have to be a Constitutional scholar to understand what happened, how it happened, and what we the citizens of the united states MUST do to insure that the bankruptcy of CORPORATE UNITED STATES does NOT fall on us!! Please read this carefully.



*April 24, 2008*


*A CLEAR AND PRESENT DANGER* - Part One


If events proceed as I hope, the Federal Reserve also will be dissolved as insolvent, and its Notes we have used as currency for 75 years will become valueless after some period where legally earned notes may be exchanged for new and legal United States money. *There will be volumes written in the future about how the United States of America, and particularly the control of our Treasury were quietly placed in private hands and secretly, from the general population, held and used there for 75 years. Those hands were for the most part,European, and had little, if any, interest in the welfare of the Citizens of this nation. Some of the "hands" were US, and they were even more ruthless. *

*But the situation has dramatically changed during the past five years, and particularly since November of 2007.*

*This narrative will necessarily begin with the Japanese invasion of Manchuria at Mukden. That is a well known historical fact. What is not as well known and understood is the "Mukden Incident" which occurred on September 18, 1931 was, in essence, a subterfuge undertaken by a few junior officers of the Japanese army when they secretly dynamited the South Manchurian Railway (owned by Japan) to provide the motive for the Japanese military conquest of Manchuria which continued until the Japanese victory on February 18, 1932 .*

*The most available explanation for the Japanese Manchurian invasion was that Japan coveted resource-rich Manchuria as a source of cheap raw materials for their burgeoning industrial complex. That explanation's basis is true, especially given an increasing shortage of favorably priced raw materials which Japan had to otherwise purchase and import from other sources.*

*But there was another, and largely hidden, reason. In 1931, the Manchuria-China border was only a few miles from Beijing where the Chinese Emperor, Pu-yi resided. The Manchu emperors kept much of their gold and other treasury items in northern Manchuria just a few miles from border, and therefore only a short distance from their Chinese capital.*

*Very shortly after the Japanese invasion commenced in southern Manchuria, a delegation sent by the United States Federal Reserve Bank to Beijing entered into negotiation with the Emperor. The Federal Reserve's offer was to quickly remove the Royal Treasury from its Manchurian location, and thereafter lease the contents of the Treasury for seventy years. In return, the Emperor received valid United States Federal Reserve bonds, maturing in seventy years, and in sufficient quantity to guarantee the debt as well as enough to pay the to-be accrued- seventy-year-interest. *

*The terms of the lease required the Emperor's estate, at the end of seventy years, to exchange the bonds with interest coupons attached, to the Federal Reserve in exchange for the return of all the Emperor's gold and other treasure, plus the accrued interest (to be paid in gold), to his estate's custody. *

*The contents of the Emperor's Manchurian Treasury were taken overland through China, and then by sea to Manila, Philippines, where the US quickly built and operated the largest gold refinery, at that time, in the world. After the gold was refined, some of it was sent to Switzerland where it was stored in extensive underground vaults under Zurich, while the greatest part was sent to the Federal Reserve vaults in New York.*

*Of course, much happened between 1931 and 2001, not the least of which was World War II and the Chinese Communist capture of all China except the island which was then called Formosa (now Taiwan). Pu-yi (the Emperor) remained a communist prisoner for many years and died as a gardener.*

*It apparently appeared to certain US and European financial interests who were interested parties in the leased Chinese Treasury, and it was probably their plan, that the Chinese imperial line died out, or at least was so impoverished that it had no means or power to recover any of their leased Treasury materials and articles. * *So seventy years passed.*

*In fact, the leasing parties grossly miscalculated. The Emperor, Pu-yi, had additional gold and other assets stored in protected places other than Manchuria-assets which escaped the attentions and discoveries of both the Japanese and Communist Chinese. Within the past two decades, much of that wealth has been returned to his grandson, a certain "Mr. Yi" who resides in Taiwan.*

*The ownership and control of the bonds which were exchanged for the Chinese Treasury were placed a number of years ago in the hands of certain surviving members of the Chinese royal family, and recently Mr. Yi. *

*So when 2001 came, Mr. Yi, The Emperor's grandson, by now a very wealthy and powerful individual, formally negotiated the return of the Chinese Royal Family's leased legal estate and the accumulated interest thereof from the United States Federal Reserve Bank (the lessor), in exchange for the Federal Reserve bonds and attached interest coupons. The returned amount of the Emperor's Treasury and interest was a very small part of what was owed.*

*A major part of the problem was that the United States Federal Reserve Bank, although owned by the United States Citizens by way of their Constitutional government, was operated from the beginning as a private organization whose assets were also privately owned, held and used (that included the entire amount collected from the Citizens/citizens as taxes). *

*The Chinese Treasury was divided for years among a number of wealthy and powerful European and North American interests, many of whom never expected the Chinese royal line to survive. Consequently, they never expected to repay either the principal or the interest due on the Chinese royal assets they held and used. *

*In fact, many of them firmly resisted Mr. Yi's legal demand that whatever Chinese royal assets they held were required to be immediately returned with all due interest. *

*After some resistance, some of the Europeans holding Chinese Treasury assets
returned some of the Emperor's Treasury, but that amount also fell far-far short of what was actually owed. *

*Mr. Yi has since used legal and financial resources available to him, especially the assistance of a little known but very powerful World Monetary Authority, to force the return of assets which are properly his.*

*That brings us the present. But before we can further address our subject, we need to explore more history-United States history. * *On April 6, 1933, President Roosevelt, with Congressional approval, declared a "national bank holiday" which lasted through April 9. There is a plethora of information about that period and the reasons causing such, but there is practically nothing said about one major event which occurred during the same time. A corporation was formed at the President's order called THE UNITED STATES OF AMERICA CORPORATION. That was done without Congressional action of any sort, so that organization is, and always has been, a privately owned, not public, corporation. At the same time, our legal system shifted from Public and English Common Law, to Private International Law.*

*THE UNITED STATES OF AMERICA CORPORATION then usurped all the identity, power, legal standing, laws and mandates, and assets of the Constitutional United States-virtually seamlessly and with hardly anyone even suspecting what had happened-for 75 years. * *Let me restate that in less complicated terms-for 75 years a private corporation, not our Constitutional government, has performed the role of our government for the exclusive benefit of that organization's shareholders and their friends. *

*The CORPORATION, through Congress, immediately passed into "law" such things as the law establishing the FEDERAL REGISTER ACT, which effectively allows the President to declare and establish "law" by publishing his declaration in the FEDERAL REGISTER, that without consulting or informing Congress, let alone requiring their debate and passage of any effective law. *

*That should explain a great deal about why our "government" consistently behaves outside our Constitution and other laws. Our Constitutional government is bound (limited) by the Constitution. The CORPORATION, however, is bound only by the tenets of the United States Code and the Code of Federal Regulations, both Private International Law, which, inthis country, may only be tried and enforced by and in Admiralty, not civil or equity courts. Equity courts were done away with by our"government" soon after our form of law was changed.*

*A large book could be (and probably should be) written on the subject of THE UNITED STATES OF AMERICA CORPORATION, however that is definitely outside the scope of this document. We will work only with the relationship of Mr. Yi and his efforts to enforce his contract with the Federal Reserve Bank. THE UNITED STATES OF AMERICA CORPORATION, since it is in mortal financial default, was forced by the Monetary Authority to negotiate, for the past several months in Switzerland, their bankruptcy. Two Mondays ago the initial bankruptcy filings of that CORPORATION were placed in the United States Supreme Court. That bankruptcy was forced by Chinese and "other" interests.*

*I posit that the Citizens/citizens (yes, there is a difference), as well as those Citizens who are also Native Americans, also have a substantial legal interest in that matter, but as yet not legally entered in the case. It is absolutely essential that the CORPORATION assets placed in the legal proceeding be only theirs, and not the assets of the Constitutional United States, their Citizens/citizens assets and persons, and anything which is the property of our Native Americans. *

*I further posit that CORPORATION owes a great debt to the Constitutional United States of America and its Citizens/citizens. Our rights will be protected only if we act-it is in no one else's interest to so do. We need several very skilled Constitutional attorneys licensed and able to practice and argue in and before the US Supreme Court. If anyone fitting that description reads this document and would agree to assist, we need to hear from you immediately.

--- end of part one ---


So here is the rest of the story:

All of the business done by the Federal Reserve Bank of America since its inception in 1913 skirted the US Constitution by calling the currency they issued as "UNITED STATES NOTES" because it was specifically unconstitutional for the word "money" to appear anywhere on any note. Had the word "money" appeared, the Fed would have been guilty of counterfeiting. Furthermore, only the US government had the authority to produce and promulgate "money." The evidence of this is to be found in Article I, Section 8 of the Constitution.

I posit that the UNITED STATES OF AMERICA CORPORATION, a private organization continuously with shareholders, officers and directors since inception, has illegally been, with the collusion of the Federal Reserve Bank (another corporation, public but operated until this last year as a private organization), in complete control of the financial life of this you know, the CORPORATION is now in bankruptcy.

As a private corporation, whatever debts they have incurred as THE UNITED STATES OF AMERICA, which by the way is virtually all the debt attributed to this nation, is actually theirs and not the Constitutional United States' and/or its Citizens/citizens. That can and will be proved in due time in a court of law, probably the US Supreme Court.

On the other hand, I believe the United States (Constitutional), its assets, its Citizens and their assets and can be proven to be not owned by THE UNITED STATES OF AMERICA, and therefore outside the bankruptcy. I believe the hyperinflation depression information (The writer's first email was posted as part of this article) sent you earlier today can be avoided if we act quickly and wisely. I can expand on that subject later.

If events proceed as I hope, the Federal Reserve also will be dissolved as insolvent, and its Notes we have used as currency for 75 years will become valueless after some period where legally earned notes may be exchanged for new and legal United States money.

I wish to see the United States to return to a precious metal basis for its money and I know how that can happen. But we have some rough water ahead, and unless we wish to experience hyperinflation depression or any part of it, we must act immediately to have something in place to replace the Fed notes we now use as currency.

I can expand on the above, but you have probably enough to think about now so I will call it a day.

April Fools: The Fox To Guard The Banking Henhouse

By Dr. Ellen Brown

Global Research, March 31, 2008

The Federal Reserve, which has been credited with creating the current housing bubble and bust just as it created the credit bubble of the Roaring Twenties and the bust of 1929, is now to be given vast new powers to oversee regulation of the banking industry and promote "financial market stability." At least, that is the gist of a Treasury Department proposal to be presented to Congress on Monday, March 31, 2008. Adrian Douglas wrote on LeMetropoleCafe.com, "I would like to think that this is some sort of sick April Fools joke, but, alas, they are serious! What happened to free markets?"1

In fact, what happened to regulating the banks? The Treasury's plan is not for the private Federal Reserve to increase regulation of the banking system it heads. Au contraire, regulation will actually be decreased. According to The Wall Street Journal:

"Many of the [Treasury's] proposals, like those that would consolidate regulatory agencies, have nothing to do with the turmoil in financial markets. And some of the proposals could actually reduce regulation. According to a summary provided by the administration, the plan would consolidate an alphabet soup of banking and securities regulators into a powerful trio of overseers responsible for everything from banks and brokerage firms to hedge funds and private equity firms. . . . Parts of the plan could reduce the power of the Securities and Exchange Commission, which is charged with maintaining orderly stock and bond markets and protecting investors. . . . The blueprint also suggests several areas where the S.E.C. should take a lighter approach to its oversight. Among them are allowing stock exchanges greater leeway to regulate themselves and streamlining the approval of new products, even allowing automatic approval of securities products that are being traded in foreign markets."2

"securities products" include the mortgage-backed securities, collateralized debt obligations, credit default swaps, and other forms of the great Ponzi scheme known as "derivatives" that have been largely responsible for bringing the banking system to the brink of collapse. But these suspect products are not to be more heavily scrutinized; rather, their approval will actually be "streamlined" and may be automatic if they are being traded in "foreign markets." The Journal observes that the Treasury's proposal was initiated last year by Secretary Henry Paulson not to "regulate" the banks but "to make American financial markets more competitive against overseas markets by modernizing a creaky regulatory system. His goal was to streamline the different and sometimes clashing rules for commercial banks, savings and loans and nonbank mortgage lenders." "streamlining" the rules evidently meant eliminating any that "clashed" with the Fed's goal of allowing U.S. banks to be more "competitive" abroad. The Journal continues:

"While the plan could expose Wall Street investment banks and hedge funds to greater scrutiny, it carefully avoids a call for tighter regulation. The plan would not rein in practices that have been linked to the housing and mortgage crisis, like packaging risky subprime mortgages into securities carrying the highest ratings. . . . And the plan does not recommend tighter rules over the vast and largely unregulated markets for risk sharing and hedging, like credit default swaps, which are supposed to insure lenders against loss but became a speculative instrument themselves and gave many institutions a false sense of security."

Regulating fraudulent, predatory and overly-speculative banking practices has been left to the States, not necessarily by law but by default. According to then-Governor Eliot Spitzer, writing in January of 2008, state regulators tried to regulate these shady practices but were hamstrung by federal authorities. In a February 14 Washington Post article titled "Predatory Lenders; Partner in Crime: How the Bush Administration Stopped the States from Stepping in to Help Consumers," Spitzer complained:

"several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive 'teaser; rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

"Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers. . . . [A]s New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices . . . .

"Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye. . . . The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). . . . In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules. But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation."

Less than a month after publishing this editorial, Spitzer was out of office, following a surprise exposé of his personal indiscretions by the Justice Department. Greg Palast observed that Spitzer was the single politician standing between a $200 billion windfall from the Federal Reserve guaranteeing the mortgage-backed junk bonds of the same banking predators that were responsible for the subprime debacle. While the Federal Reserve was trying to bail them out, Spitzer had been trying to regulate them, bringing suit on behalf of consumers.3 But Spitzer has now been silenced, and any other state attorneys general who might get similar ideas will be deterred by the federal oversight under which banking regulators are to be "consolidated."

The Federal Reserve under Alan Greenspan deliberately enabled and permitted the derivatives debacle to take down the dollar and America's credibility. Greenspan is now lauded, feted and awarded at the White House and on network television, and takes a victory lap tour promoting and signing his book and celebrating his multimillion dollar book deal, enjoying his knighthood status in England and hero status on Wall Street. And as the falling debris of the American economy still piles up around us, the very agency that enabled disaster is now seeking to consolidate ultimate authority and accountability to itself, and through centralization and arrogation of power, eliminate all those pesky little Constitutional and State regulations and agencies, recalcitrant governors and the last few whistle blowers, so that the further abuse of power can be streamlined through one agency only. That agency is to consist of an alliance of the banking powers and the executive branch, a perfect formula for the institutionalization of continual abuse.

Perhaps Spitzer was lucky that he was the target only of a character assassination. When Louisiana Senator Huey Long challenged the Federal Reserve and fought for the State's right to oversee its own financial affairs in the 1930s, he was assassinated with bullets. Long's local assertion of decentralized State powers, as provided for in the Tenth Amendment to the Constitution, enabled the State of Louisiana to loosen the grip of the corporations on the State's wealth and allowed the setting up of schools and public institutions that elevated the people of the State and placed its "common wealth" back into the hands of its citizens, while providing employment and education. The Constitution reserves to the States and the people all those powers not specifically delegated to the federal government, arguably including the creation of money itself, which is nowhere specifically mentioned in the Constitution beyond creating coins. (See E. Brown, "Another Way Around the Credit Crisis: Minnesota Bill Would Authorize State Banks to Monetize; Productivity," www.webofdebt.com/articles, March 23, 2008.) But in this latest attempt at expanding the Federal Reserve's already over-expansive powers, we see clear evidence that the Wall Street and global banking powers have no intention of allowing their plans to be reined in by the Constitutional powers of the States and the people. Instead, they intend to fill up the moat and pull up the draw bridge on their feudal powers, and let the serfs shiver outside the gates for as long as they will put up with it.