Still alive! So, a quick review from Part One. The BBP (Brilliant Batch of Politicians) is once again conducting the PCC (the Parade, the Charade, of Charlatans), threatening to shut the US Government down over the “debt ceiling.”

But we know Article I, Section 8, Clause 5 of the US Constitution says:

[The Congress shall have Power] To coin Money and regulate the Value thereof

So, we know the US Government is the creator, the source, of the nation’s money. We know the US Government always has money of its own (for Heaven’s sake it creates the money). We know the US Government can never run out of money. There, the review of Part One is done. Thank God!

But all of this leads to some major questions. If the US Government is the Constitutionally authorized creator and supplier of the nation’s money, why on Earth would the Federal Government ever borrow money? It can make its own money!  Why on Earth is our Federal Government in debt? Why on Earth is our Federal Government paying billions of dollars of interest on borrowed money it has the power to create – interest and debt free – by itself? It makes no sense!

Well, there’s a glitch in the US Government’s money creation system called the US Federal Reserve Bank (the Fed). A big glitch. It effectively requires our Federal Government to borrow its own money. That’s a big glitch.

To understand we need to go back to the beginning. Way back. “In The Beginning” – you know – God created the Firmament and the Heavens and Earth and all that stuff. But God never created money. Man had to do that.

Well, since time immemorial, private individuals called bankers have tried to own and control the power of money creation. If they could create the money instead of letting governments create their own interest free public money, why they could control that government and all the people living under it. All while becoming fabulously rich by collecting interest on money they concocted out of nowhere to begin with. What a deal!

But then the stupid US Constitution came along and gave the money creation power to the Government! To the public for the love of lumbago! How’s a banker supposed to get rich and run the country?! Just look at what happened in the 1860’s during the US Civil War. That Lincoln guy went and created the “Greenback.” Debt free government created money that paid for everything and kicked the bankers right out of war profiteering. What kind of a man, what kind of a nation would do something so dastardly! Look what Lincoln actually said!:

“The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.” – Abraham Lincoln

Something had to be done! The government was messing with the private banking racket!

Jump to 1913 (ominous music in the background). “How about we bankers secretly meet for a week on Jekyll Island (you can’t make this stuff up) and create something called the US Federal Reserve Bank. Great! We bankers will control it and return the money creation power to its rightful owners – us – but it will sound like a public institution. People will believe anything! Get a few important legislators involved and run it through congress.”

This is obviously an oversimplification of a very complex subject. But there actually was a secret meeting at a very posh resort on Jekyll Island off the coast of Georgia owned by J.P. Morgan and a few other extraordinarily wealthy individuals. The US Federal Reserve Banking System was in fact created at this meeting, and for all practical purposes the public money creation power of the US Treasury was taken over by the private banks with the net result that the US Government does effectively end up borrowing its own money at interest, resulting in our government debt.

Confirming this, the late US Congressman Wright Patman, Chairman of the House Committee on Banking and Currency for several decades, fought for years to have the Fed abolished. The following is testimony between Patman and then Chairman of the Fed, Marriner S. Eccles, taken from the March 3-5, 1947 Congressional Record:

CONGRESSMAN PATMAN: “We have what is known as the Federal Reserve Bank System. That system is not owned by the Government. Many people think that it is because it says “Federal Reserve.” It belongs to private banks, private corporations. So we have farmed out to the Federal Reserve Banking System – that which is owned exclusively, wholly, one hundred percent to the private banks – we have farmed out to them the privilege of issuing the Government’s money!”

“The original act as passed in 1913, up until about 1935, gave the Federal Reserve banks that power is that right? . . . Yes; now, since 1935, in order for the Federal Reserve banks to buy Government bonds, they had to go through a middleman, is that correct?”

CHAIRMAN ECCLES: “That is correct.”

Mr. PATMAN: “In other words, Mr. Eccles, that is an argument in favor of the Government selling bonds to the commercial banks and permitting them to pay for them by a bookkeeping transaction and receive interest on them in order to pay the cost of carrying their accounts with individuals and corporations; is that correct?”

Mr. ECCLES: “That is right.”

Mr. PATMAN: “In other words, it is a subsidy, is it not? In the beginning, may I make it plain that I am not opposed to interest being paid by individuals or corporations for the use of other people’s money that they have hired [borrowed]. Neither am I opposed to the payment of interest by States, counties, and political subdivisions for money that they hire [borrow]. I am opposed to the United States Government, which possesses the sovereign and exclusive privilege of creating money, paying private bankers for the use of its own money. These private bankers do not hire [lend] their own money to the Government; they hire [lend] only the Government’s money to the Government, and collect an interest charge annually. . . .” (bold added)

Later in the hearing:

Mr. PATMAN: “What better evidence do you want than that, gentlemen? There is no dispute about what I say, and I insist it is absolutely wrong for this committee to permit this condition to continue and saddle the taxpayers of this Nation with a burden of debt that they will not be able to liquidate in a hundred years or two hundred years.”

Mr. ECCLES: “The framers of the United States Constitution, in article I, section 8, very wisely said: “Congress shall have the power to coin money and regulate the value thereof.” This provision of the Constitution is mandatory. All Members of Congress are sworn to uphold the Constitution. Why has this provision never been carried out? The answer is simple. In the early days of our national existence the people were deceived into believing that the subject of money was so mysterious and intricate that only a few of the financiers understood the subject and therefore the great privilege of issuing and distributing money should be farmed out to them. This was done, and it has never been changed, except to give them more power and authority.” (bold added)

To learn more, see this article by Attorney Ellen Brown of the Public Banking Institute: