Rumors of FED Closure Sound Like Apocalypse to Media

Rumors of FED Closure Sound Like Apocalypse to Media

Over the past months, a grim sense of foreboding has surfaced increasingly often in the media. Currently, the Apocalypse seems to be scheduled for 21.12.2012, the supposed expiration date for the franchise of the dollar-printing presses to the US Federal Reserve. 

A Look Back: the US Federal Reserve Act of 1913

The Fed story began to unfold back on December 21, 1913 when the US Congress passed the Federal Reserve Act which established a US central bank and authorized it to print the national currency. The apocalyptic expectations voiced by the media essentially combine the following assumptions:

1. The Fed printing press will come to a grinding halt on the aforementioned date, December 21, 2012.

2. In no time, the US and the global economies, heavily dependent on dollar emissions, will be hit by a liquidity drought, with all types of economic activity plunged into chaos, production and consumptions shrinking, and tensions rising across societies worldwide.

3. The deterioration of the socioeconomic climate will translate into multiple conflicts of various proportions which, in a global synergy, will add up to a world war with the deadly WMD stockpiles put to work.

In other words, a chain reaction will tentatively be ignited on December 21 and the Apocalypse is to follow with a certain delay.

The expiration of the dollar-printing presses franchise literally means that, within less than three months from now, the licenses issued by the US Congress to state-chartered banks, based on which they create the legal tender known as the US dollar, must come to an end. The purpose of the paper is to challenge the assumption that December 21 is the preset expiration date and to lay out a vision of the Fed's hypothetic future.

The Federal Reserve Act was indeed passed on December 21, 1913. In finer detail, the chronology was as follows:

December 22, 1913 – the US House of Representatives held a vote over the Federal Reserve Act.

December 23, 1913 – the Act was passed by the US Senate.

December 23, 1913 – an hour after the above, the legislation was enacted by US President W. Wilson.

It is unclear how at all December 21 fits into the scheme. Chances are the media liked the 21.12 sequence, and that reeks of some kind of Kabbalah. 

The Printing Press: What is the Real Term of Franchise?

As stated in Section 4 of the Act in its 1913 form, the twelve Fed banks were empowered for a period of twenty years, that is, till 1933. Mischief on the Fed behalf could result in the franchise being revoked earlier: «To have succession for a period of twenty years from its organization unless it is sooner dissolved by an Act of Congress, or unless its franchise becomes forfeited by some violation of law». // P.L. 63-43, 38 STAT. 251, 12 USC 221). 

The term of twenty years is traditional for US central banks. Bank of America was the first prototype of the Fed, with the First US Bank and the Second US Bank coming next. Bank of America was chartered in 1781 but it transpired shortly thereafter that the institution posed a serious threat to the whole societal order created by the American Revolution, and the bank lost its charter after four years of existence. The First US Bank had a twenty-year charter and functioned till the term end, after which the license was not renewed. The Second US Bank was inaugurated by the US Congress in 1816 to face early closure in 1834 in an episode that cost US President A. Jackson plenty of effort and considerable risk. After that, the US had no central bank for some eight decades regardless of how the bankers tried to get the American nation to tolerate one. 

It is routinely held that the Fed franchise has long been reset to last indefinitely. The view is likely to be correct, but controversy persists over the question at what moment the lease of the dollar-printing presses became open-ended. Around 200 pieces of legislation concerning the Fed came into being since it was founded slightly under a century ago. With the original 1913 Act so extensively amended, the situation may not be completely lucid, but, anyhow, the Fed legislation currently in effect is to be be found in the comprehensive United States Code (USC). 

For a reason that is not immediately obvious, the switching to an indefinite franchise for the Fed is attributed to the F. Roosevelt Administration which moved into the White House in January, 1933. Allegedly, having the Congress approve the corresponding amendment at a secret meeting was Roosevelt's literally first step as the US President. A paper by Wayne N. Krautkramer - The Federal Reserve - Its Origins, History & Current Strategy // // 11.11.2010 – offers a fairly common conspirological account of the reform. «Sec. 341 Second. To have succession for a period of twenty years from its organization unless it is sooner dissolved by an Act of Congress, or unless its franchise becomes forfeited by some violation of law. The Federal Reserve was only given a corporate life of 20 years! Their time was up in 1933. Who was President at that time? Franklin. D. Roosevelt, of course. Somehow, the Federal Reserve's termination did not occur», writes Krautkramer.

The truth, though, is that it was not President Roosevelt who did the bankers the huge favor. Legislation was passed earlier, in 1927, to lift the time constants on the Fed's authority to create money. The text was: «To have succession after February 25, 1927, until dissolved by Act of Congress or until forfeiture of franchise for violation of law», which, in a key departure from the 1913 original, contains no passage about «a period of twenty years». Tap into to gauge the difference. 

Present-day Fed Debate

Importantly, the Fed is still subject to closure by the US Congress if:

The Congress decides to terminate the institution, even with breaches perpetrated by the Fed;

In case the Fed violates the 1913 code.

I find it hard to overlook the fact that the Fed long deserves to be disbanded as punishment for gross violations of the US laws. In a stark example, the Fed poured, in absolute secrecy, loans of epic proportions into troubled private banks in the course of the crisis that keeps rolling. A Fed audit that failed to establish the entire picture showed that the total topped $16 trillion and that a cohort of non-American banks were among the recipients. Normally, the Fed's dishing out loans to nonresidents requires the approval of the Congress, but the US Reps and Senators were held completely in the dark and up to date – a year since the audit findings were released – Fed chief B. Bernanke offers no legible justification for the mysterious transactions. 

Upon scrutiny, the mystery is not that hard to unravel: if you care to drill down to the bedrock of the problem, you will simply realize that the global financial sector and the American nation are locked in a deepening conflict. So far the bankers appear to be immune, though the intensity of rage against their corrupt and predatory games is at the moment higher than ever since the Fed was established in 1913. On the other hand, the news that, on July 25, the US Congress passed 327:98 the Audit the Fed Bill floated by legendary Senator Ron Paul surely grabbed the media headlines. The plan calls for a sweeping Fed probe including an inquiry into how its status agrees with the US Constitution which, it must be noted, exclusively enables the US nation and its elected Congress to print money. For most Americans, the discovery that the right had, for 99 years, been usurped by a private corporation, came as an ill surprise. Moreover, the US nation is still clueless about the lucky owners of the private enterprise. Several probes – particularly, Eustace Mullins' Secrets of the Federal Reserve - indicate that the bulk of Fed assets are in the hands of big-name non-American private banks. Curiously, neither Ron Paul nor other Fed critics from the ranks of the US Congress who, no doubt, know the pertinent legislation throughout ever mentioned that the Fed franchise ends late this year. Due to the powerful resistance mounted by the Fed proprietors, the audit bill is not signed into law and prospects for the initiative are dim, but in any case it marks a pivotal point in the US and global politics, and that is a lot more real than the mysticism linked to the combination of digits in 21.12.2012.

It may be that the jam was the reason which compelled B. Bernanke and the Fed's Open Market Committee to rush into the third round of quantitative easing. The latter is an euphemism for feeding tons of cash to Wall Street grands in the form of the FED spending $40b monthly to buy toxic assets under the pretext of fighting unemployment. Are the bankers whose rights to the dollar-printing press are about to expire seizing on the collapsing opportunity to rip off the benefits?

The Fed is searching desperately for self-rescue options. The game is played in an aggressive mode, wars are unleashed one after another far from the US in the hope that the US nation – the constituency, senators, etc – will focus on conflicts with Islam, terrorism, crumbling dictatorships, and whatever, and the problem of the Fed's status will recede from the public discourse. In the meantime, the financial tycoons intend to capitalize on drawing the US into hostilities with the rest of the world. If the strategy materializes, a global-scale Apocalypse will indeed be within sight. 

The Fed must be terminated as the US laws require, and there is no point in postponing the overdue measure till December 21 or any other date. Ron Paul wrote on the issue convincingly in his End the Fed, which quickly jumped to the US bestseller list. End the Fed – in the interests of the US and the whole world…

Tags:     Bernanke