Sadly, most Americans don't even realize that a private banking cartel has a monopoly over all money creation in this country. In recent years they have abused this power by wildly printing money ("quantitative easing"), and by making more than 16 trillion dollars in secret loans to their friends during the last financial crisis. Under our system, the private Federal Reserve creates money whenever they want, and nobody else gets to create money.
It is an insane system, but very, very few of our politicians will ever dare to question it.
At this point, the U.S. Treasury Department is essentially just an arm of the Federal Reserve. That is why it was no surprise that the Fed and the Treasury Department issued a joint statement on Saturday.
According to Treasury spokesman Anthony Coley, both the Treasury and the Fed have come to the conclusion that under no circumstances should a trillion dollar coin be printed up by the Obama administration...
"Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit"
But of course it was actually the Federal Reserve which made this decision. The following is from a report posted by Zeke Miller ofBuzzfeed.com...
The Federal Reserve was responsible for killing a controversial proposal to circumvent the debt limit, a senior administration official told BuzzFeed Sunday.
On Saturday the Treasury Department released a statement ruling out the only remaining alternative to Congress raising the nation's borrowing limit, which would utilize a loophole in federal law to mint a $1 trillion coin to be deposited in the Federal Reserve and ensure the federal government could pay all bills and debt obligations.
According to that Buzzfeed article, the Federal Reserve would have actually refused to recognize the trillion dollar coin if the Obama administration had tried to deposit it with the Fed...
But it was the Federal Reserve that killed the proposal, the official told BuzzFeed, denying a purely political rationale for the announcement, saying the independent central bank would not have credited the Treasury's accounts for the vast sum for depositing the coin.
So there you go.
The real boss has told Barack Obama how it is going to be, and Obama plans to meekly comply.
So why is the Federal Reserve so adamant about maintaining their monopoly over money creation?
Well, it is all about compound interest. Albert Einstein once madethe following statement about compound interest...
"Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it."
When the Federal Reserve system was initially created back in 1913, the bankers that created it intended for it to be a perpetual debt machine that would extract massive amounts of wealth from the U.S. government (and ultimately from all of us) through the mechanism of compound interest.
Each year, hundreds of billions of dollars of interest are transferred into the pockets of the wealthy bankers and foreign nations that own our debt. This is one of the reasons why I preach about the evils of government debt until I am blue in the face. The debt-based Federal Reserve system is a way to systematically steal the wealth of the United States, and it is happening right in front of our eyes, but very few people actually understand it well enough to complain about it.
Unfortunately, we are rapidly getting to the point where we have accumulated so much debt that it is threatening to collapse our entire financial system.