From: politics@not-any-spam.com   
      
   How the American economy works   
   (written in plain English by castleman)   
      
   The Federal Reserve is comprised of twelve Federal Reserve bank   
   corporations. Every American bank must become a stockholder in a Federal   
   Reserve bank corporation.  There are no government-owned banks in America.   
      
   When a Federal Reserve bank wants free new Federal Reserve notes, as it   
   often does, it tells the U.S. Treasury department how many new notes to   
   print and send to it.  In other words, though the physical printing presses   
   for Federal Reserve notes are housed at the U.S. Treasury department, the   
   Treasury has no say in how many are printed nor does it get to keep the new   
   notes printed.  This new currency is given to the banks for free (though   
   they must pay a small printing charge of about 3 cents per note).   
      
   These banks then spend this new money on whatever they like; they lend it to   
   state and local governments, to the federal government and to foreign   
   governments and to private citizens.  They also spend some of this new   
   currency buying real estate, starting up media companies, etc.  The Federal   
   Reserve Bank of New York, Inc., is by far the largest of the twelve Federal   
   Reserve bank corporations which comprise the Federal Reserve System.  It was   
   reported that in 1992 this New York Federal Reserve bank received $100   
   billion in new dollars for free, which this bank then gave free to its   
   stockholder banks. This is quite a sum for a group of private corporations   
   to receive for free.   
      
   America's great strength was not Fed-inspired   
   We should point out that America did not become a superpower by issuing   
   Federal Reserve notes; these notes are recent arrivals.  In 1913 the   
   privately-owned national banks' new Federal Reserve notes joined the U.S.   
   government's Gold Certificates, the Silver Certificates and United States   
   notes.  The latter being identical to Federal Reserve notes except that they   
   have red serial numbers and the government gets these when they are printed.   
   It was made to appear within the poorly written Federal Reserve Act of 1913   
   that the new Federal Reserve notes were to be used only as "IOUs" between   
   member banks, not intended for use by the general public.  The following is   
   an excerpt from the Federal Reserve Act of 1913, which calls for the   
   printing of the new Federal Reserve notes . . .   
      
   "Federal Reserve notes, to be issued at the discretion of the Federal   
   Reserve Board for the purpose of making advances to Federal Reserve banks   
   through the Federal Reserve agents as hereinafter set forth and for no other   
   purpose, are hereby authorized.  The said notes shall be obligations of the   
   United States and shall be receivable by all national and member banks and   
   Federal Reserve banks and for all taxes, customs, and other public dues.   
   They shall be redeemed in gold on demand at the Treasury department of the   
   United States."   
   The Statutes at Large of the United States of America from March 1913 to   
   March 1915. Volume XXXVIII, The Federal Reserve Act, Ch. 6, 1913, Sect. 16,   
   pg 265.   
      
   Of all the institutions mentioned above, only the Treasury department is   
   part of the government. The Federal Reserve banks are all privately-owned   
   with private stockholders. As we can see above, the term reserve is used to   
   make us think it really isn't currency, as in "We won't spend it, we'll keep   
   it in reserve".  Or, one might think that these new notes are only intended   
   for use as "advances" to member banks.   
      
   How inflation works   
   For zero inflation to occur, a government can only print new currency to   
   match the new goods and services created.  But if 10 billion dollars worth   
   of, say, new pornography enters the market then a government can print 10   
   billion new dollars to match it without causing any inflation.  The problem   
   is, that 10 billion dollars worth of new pornography entering the market   
   creates social problems. This would be greater government expenditures on   
   crime, drug-use, counseling services for divorce, depression, etc, all of   
   which comes from the taxpayer. In America, however, the national banks have   
   been printing the currency since 1982, not the government.   
      
   If 100,000 people in America's inner cities arrive in emergency rooms with   
   gunshot wounds, where each patient requires $100,000.00 average worth of   
   hospital treatment, then the national banks can print an extra   
   $10,000,000,000.00 in new currency for themselves to spend without causing   
   any inflation.  These banks can lend and invest this money wherever they   
   want.  The hospitals paying these added expenses pass these new costs on to   
   insurance companies and the federal government.   
      
   A dangerous problem occurs when a privately-owned central bank prints the   
   currency because, while a government would surely not be interested in   
   printing 10 billion new dollars to match new problematic goods that will   
   cause the government to go into debt, a privately-owned central bank may   
   because it does not have to pay for these higher social problem costs (the   
   taxpayer does).  Additionally, and as is currently the case in America, when   
   the government is forced to spend this extra money it often must borrow it,   
   and it borrows it through the very same privately-owned central bank which   
   benefitted by the initial 10 billion dollars printed.  This is precisely   
   what the Federal Reserve corporation has been doing in America during the   
   past decade, where the 2% and 3% economic growth rates listed each year were   
   not a result of good manufacturing jobs being created, this was merely the   
   new currency printed to match the massive immigration each year, vast   
   amounts of new illegal drugs arriving, millions of people getting involved   
   in gambling, prostitution and pornography along with the resulting   
   skyrocketing of AIDS and STD cases, counseling for depression, family   
   problems, etc. The Federal Reserve corporation is owned by America's   
   national banks. It is not owned by the government.   
      
   If a young girl finishes school and gets a new job earning $20,000.00 per   
   year, then the privately-owned Federal Reserve can print $20,000.00 without   
   causing any inflation.  This is not "too much money chasing too few goods   
   and services" because there is now that exact same amount worth of new   
   services created.  This is known as economic growth.  If, however, this   
   young girl instead gets involved in prostitution where she earns $50,000.00   
   per year, even if this profession is illegal, then the national banks (via   
      
   [continued in next message]   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)