banking

"The Consumer Price Index is 15 times higher than it was when the Federal Reserve was founded in 1913. In the hundred years prior to the advent of the Federal Reserve, prices in America fell by one third."

"This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President signs this bill, the invisible government by the Monetary Power will be legalized […] the worst legislative crime of the ages is perpetrated by this banking bill."

"We don't know what would have happened had [[w:Benjamin_Strong|[Federal Reserve Governor Benjamin] Strong]] lived; but what we do know is that the central bank of the world's economically most important nation in 1929 was essentially leaderless and lacking in expertise. This situation led to decisions, or nondecisions, which might well not have occurred under either better leadership or a more centralized institutional structure. Associated with these decisions, we observe a massive collapse of money, prices, and output. … Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton [Friedman] and Anna [Schwartz]: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."

"The Fed is a disaster. We should have a discussion in this country about whether we need a Fed."

"The Federal Reserve, as one writer put it, after the recent increase in the discount rate, is in the position of the chaperone who has ordered the punch bowl removed just when the party was really warming up."

"Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal reserve banks. The Federal Reserve Board, a Government board, has cheated the Government of the United States out of enough money to pay the national debt. The depredations and the iniquities of the Federal Reserve Board and the Federal reserve banks acting together have cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our Government. It has done this through defects of the law under which it operates, through the maladministration of that law by the Federal Reserve Board and through the corrupt practices of the moneyed vultures who control it."

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and the corporations which grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered."

"No observer has succeeded in pinpointing the spark that set off the roaring conflagration that swept and eventually consumed the securities markets in 1928 and 1929. Clearly, however, its sustaining oxygen was a matter not only of recondite market mechanisms and traders’ technicalities but also of simple atmospherics—specifically, the mood of speculative expectation that hung feverishly in the air and induced fantasies of effortless wealth that surpassed the dreams of avarice. Much blame has been leveled at a feckless Federal Reserve System for failing to tighten credit as the speculative fires spread, but while it is arguable that the easy-money policies of 1927 helped to kindle the blaze, the fact is that by late 1928 it had probably burned beyond controlling by orthodox financial measures. The Federal Reserve Board justifiably hesitated to raise its rediscount rate for fear of penalizing nonspeculative business borrowers. When it did impose a 6 percent rediscount rate in the late summer of 1929, call loans were commanding interest of close to 20 percent—a spread that the Fed could not have bridged without catastrophic damage to legitimate borrowers. Similarly, the board had early exhausted its already meager ability to soak up funds through open-market sales of government securities. By the end of 1928, the system’s inventory of such securities barely exceeded $200 million— a pittance compared to the nearly $8 billion in call loans then outstanding. By ordinary measures, in fact, credit was tight after 1928. Mere money was not at the root of the evil soon to befall Wall Street; men were—men, and women, whose lust for the fast buck had loosed all restraints of financial prudence or even common sense."

"So I think the reason that the newspapers are going quiet on this is the Fed broke the law. And it wants to continue breaking the law. And that's why these Wall Street banks fought so hard to get the current head of the Fed reappointed, [[Jerome Powell|[Jerome] Powell]], because they know that he's going to do what [[Timothy Geithner|[Timothy] Geithner]] did under the Obama administration. He's loyal to the New York City banks, and he's willing to sacrifice the economy to help the banks. Because those are the clients of the New York Fed, the big New York banks. And that's been the case ever since I was on Wall Street half a [century] ago. And Pam [Martens] is trying to expose how these banks are crooked, and really what the whole problem was. She points out that the Fed is supposed to make short-term loans, but these are long-term loans."

"...Pam Martens is very clear... She points out the reason that the regular newspapers don't report it is the loans violated every element of the Dodd-Frank laws that were supposed to prevent the Fed from making loans to particular banks that were not part of a liquidity crisis. In her article, she makes very clear by pointing out these three banks, Chase Manhattan, Goldman Sachs – which used to be a brokerage firm – and Citibank, that the Federal Reserve laws and the Dodd-Frank Act explicitly prevent the Fed from making loans to particular banks. It can only make loans if there's a general liquidity crisis. And we know that there wasn't at that time, because she lists the banks that borrowed money, and there were very few of them."

"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and through its Board of Governors manipulates the credit of the United States."

"The Federal Reserve Banks, while not part of the government, are the central banking sytem for the Nation.… Holdings of Federal debt by the Federal Reserve Banks do not have the same impact on private credit markets as other debt held by the public. Their holdings of Federal debt arise from their role as the country's central bank."

"The lifeblood of our economy, indeed the whole world's economy, is based on money. Without a currency that can be trusted, the entire structure of economics, the division of labor itself, falls apart. Our wealth, our well being and our very lives are dependent on the continuation of this highly complex structure called the economy and it in turn is dependent on sound money. We have placed our trust for the management of this money on a gang of thieves called the Federal Reserve. They have now clearly demonstrated their inability to restrain themselves from the excesses that can be perpetrated within a paper money system. If we want to survive as a nation, we need to eliminate both the Federal Reserve and paper money."

"The Federal Reserve and this administration failed the American people by not heeding these warnings a year ago, and not acting sooner to address it"

"Our power has been created through the manipulation of the national monetary system. We authored the quotation, 'Money is power.' As revealed in our master plan, it was essential for us to establish a private national bank. The Federal Reserve system fitted our plan nicely since it is owned by us, but the name implies that it is a government institution. From the very outset, our purpose was to confiscate all the gold and silver, replacing them with worthless non-redeemable paper notes. This we have done! ... The examples are numerous, but a few readily apparent are the stocks and bonds market, all forms of insurance, and the fractional reserve system practiced by the Federal Reserve corporation, not to mention the billions in gold and silver that we have gained in exchange for paper notes, stupidly called money. Money power was essential in carrying out our master plan of international conquest through propaganda."

"I cannot say with what deep emotions of gratitude I feel that I have had a part in completing a work which I believe will be of lasting benefit to the business of the country."

"By making money artificially scarce interest rates throughout the country can be arbitrarily raised and the bank tax on all business and cost of living increased for the profit of the banks owning these regional central banks, and without the slightest benefit to the people. These 12 corporations together cover the whole country and monopolize and use for private gain every dollar of the public currency, and all public revenues of the United States."

"The powers vested in the Federal Reserve Board seem to me highly dangerous especially when there is political control of the Board. I should be sorry to hold stock in a bank subject to such dominations. The [Federal Reserve] bill as it stands seems to me to open the way to a vast inflation of the currency.… I do not like to think that any law can be passed that will make it possible to submerge the gold standard in a flood of irredeemable paper currency."

"It is proposed that the Government shall retain sufficient power over the reserve banks to enable it to exercise a direct authority when necessary to do so, but that it shall in no way attempt to carry on through its own mechanism the routine operations and banking which require detailed knowledge of local and individual credit and which determine the funds of the community in any given instance. In other words, the reserve-bank plan retains to the Government power over the exercise of the broader banking functions, while it leaves to individuals and privately owned institutions the actual direction of routine."

"Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities for purposes of the FTCA [Federal Tort Claims Act], but are independent, privately owned and locally controlled corporations."

"The Federal Reserve Board regulates the Reserve Banks, but direct supervision and control of each Bank is exercised by its board of directors."

"The Banks are empowered to sue and be sued in their own name…. They carry their own liability insurance and typically process and handle their own claims. In the past, the Banks have defended against tort claims directly, through private counsel, not government attorneys…."

"The Reserve Banks have properly been held to be federal instrumentalities for some purposes…. This court held that a Federal Reserve Bank employee who was responsible for recommending expenditure of federal funds was a "public official" under the Federal Bribery Statute."

"The Reserve Banks are deemed to be federal instrumentalities for purposes of immunity from state taxation…. The test for determining whether an entity is a federal instrumentality for purposes of protection from state or local action or taxation, however, is very broad: whether the entity performs an important governmental function…. The Reserve Banks, which further the nation's fiscal policy, clearly perform an important governmental function."

"Brinks Inc. v. Board of Governors of the Federal Reserve System … held that a Federal Reserve Bank is a federal instrumentality for purposes of the Service Contract Act.… Unlike in Brinks, plaintiffs are not without a forum in which to seek a remedy, for they may bring an appropriate state tort claim directly against the Bank; and if successful, their prospects of recovery are bright since the institutions are both highly solvent and amply insured."

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit…."

"Globalization creates interlocking fragility, while reducing volatility and giving the appearance of stability. In other words it creates devastating Black Swans. We have never lived before under the threat of a global collapse. Financial Institutions have been merging into a smaller number of very large banks. Almost all banks are interrelated. So the financial ecology is swelling into gigantic, incestuous, bureaucratic banks — when one fails, they all fall. The increased concentration among banks seems to have the effect of making financial crisis less likely, but when they happen they are more global in scale and hit us very hard. We have moved from a diversified ecology of small banks, with varied lending policies, to a more homogeneous framework of firms that all resemble one another. True, we now have fewer failures, but when they occur... I shiver at the thought."

"There ain't nothin' to it. You go into the fancy meeting room and you just sit there and never open your yap. As long as you don't say nuthin' they don't know whether you're smart or dumb. When the question of a loan comes up, if it's a friend of yours, you vote to give it to him and if he ain't a friend, you don't."

"In the epoch of imperialism, the bankers became the aristocrats of the capitalist world."

"Since those who rule in the city do so because they own a lot, I suppose they're unwilling to enact laws to prevent young people who've had no discipline from spending and wasting their wealth, so that by making loans to them, secured by the young people's property, and then calling those loans in, they themselves become even richer and more honored."

"But please do not think that I am not fond of banks, Because I think they deserve our appreciation and thanks."

"We [Banks] have a "right to make a profit""

"With money every form of intercourse, and intercourse itself, is considered fortuitous for the individuals."

"So limited is our knowledge that we resort, not to science, but to shamans. We place control of the world's largest economy in the hands of a few elderly men, the central bankers."

"While economic textbooks claim that people and corporations are competing for markets and resources, I claim that in reality they are competing for money - using markets and resources to do so. So designing new money systems really amounts to redesigning the target that orients much human effort... Greed and competition are not a result of immutable human temperament... greed and fear of scarcity are in fact being continuously created and amplified as a direct result of the kind of money we are using. For example, we can produce more than enough food to feed everybody, and there is definitely enough work for everybody in the world, but there is clearly not enough money to pay for it all. The scarcity is in our national currencies. In fact, the job of central banks is to create and maintain that currency scarcity. The direct consequence is that we have to fight with each other in order to survive."

"And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."

"Money is created when banks lend it into existence. When a bank provides you with a $100,000 mortgage, it creates only the principal, which you spend and which then circulates in the economy. The bank expects you to pay back $200,000 over the next 20 years, but it doesn't create the second $100,000 - the interest. Instead, the bank sends you out into the tough world to battle against everybody else to bring back the second $100,000."

"The use of money does not disestablish the normal process of creating credit. Money, it is true, is always being paid into the banks by the retailers and others who receive it in the course of business, and they of course receive bank credits in return for the money thus deposited. But for the manufacturers and others who have to pay money out, credits are still created by the exchange of obligations, the banker's immediate obligation being given to his customer in exchange for the customer's obligation to repay at a future date. We shall still describe this dual operation as the creation of credit. By its means the banker creates the means of payment out of nothing, whereas when he receives a bag of money from his customer, one means of payment, a bank credit, is merely substituted for another, an equal amount of cash."

"The process by which banks create money is so simple that the mind is repelled."

"The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it."

"Bankers have no right to establish a customary law among themselves, at the expence of other men."

"The reason that the United States had a banking industry that was radically better for the economic prosperity of the country had nothing to do with differences in the motivation of those who owned the banks. Indeed, the profit motive, which underpinned the monopolistic nature of the banking industry in Mexico, was present in the United States, too. But this profit motive was channeled differently because of the radically different U.S. institutions. The bankers faced different economic institutions, institutions that subjected them to much greater competition. And this was largely because the politicians who wrote the rules for the bankers faced very different incentives themselves, forged by different political institutions. Indeed, in the late eighteenth century, shortly after the Constitution of the United States came into operation, a banking system looking similar to that which subsequently dominated Mexico began to emerge. Politicians tried to set up state banking monopolies, which they could give to their friends and partners in exchange for part of the monopoly profits. The banks also quickly got into the business of lending money to the politicians who regulated them, just as in Mexico. But this situation was not sustainable in the United States, because the politicians who attempted to create these banking monopolies, unlike their Mexican counterparts, were subject to election and reelection. Creating banking monopolies and giving loans to politicians is good business for politicians, if they can get away with it. It is not particularly good for the citizens, however. Unlike in Mexico, in the United States the citizens could keep politicians in check and get rid of ones who would use their offices to enrich themselves or create monopolies for their cronies. In consequence, the banking monopolies crumbled. The broad distribution of political rights in the United States, especially when compared to Mexico, guaranteed equal access to finance and loans. This in turn ensured that those with ideas and inventions could benefit from them."

"We are not against borrowing money and we are not against bankers. We are against trying to make borrowed money take the place of work. We are against the kind of banker who regards a business as a melon to be cut. The thing is to keep money and borrowing and finance generally in their proper place, and in order to do that one has to consider exactly for what the money is needed and how it is going to be paid off."

"The 12 regional reserve banks aren't government institutions, but corporations nominally 'owned' by member commercial banks."

"Commercial banks create checkbook money whenever they grant a loan, simply by adding new deposit dollars in accounts on their books in exchange for a borrower's IOU."

"The actual process of money creation takes place in commercial banks. As noted earlier, demand liabilities of commercial banks are money. … Confidence in these forms of money also seems to be tied in some way to the fact that assets exist on the books of the government and the banks equal to the amount of money outstanding, even though most of the assets themselves are no more than pieces of paper..."

"Banks do not have an obligation to promote the public good."

"Banks are the temples of America. This is a holy war. Our economy is our religion."

"I am just a banker "doing God’s work"."

"The best way to rob a bank is to own one."