The invisible hand of the market has perceptibly rummaged in the pockets of ordinary Americans over the past year. The total debt of local households grew by the fall to a cosmic sum of 15 trillion dollars – about 155 thousand per family. This is not to mention such a trifle as the US national debt, which is approaching the hard-to-imagine $ 29 trillion.
The country, which by inertia is called the first economy in the world, is on the verge of a completely real default. Discouraged Americans are frantically looking for ways to escape. The eccentric politician Ron Paul suggested against this background that the Fed should be dispersed altogether.
At first glance, this sounds like a joke. The US Federal Reserve, “the bank of all banks,” is the superstructure that determines the weather in the financial world. Bankers and brokers of all countries read their fate from the expression on the face of the Fed chairman. Fluctuations in the Fed’s rate are a major event for exchanges.
However, this was not always the case. The Federal Reserve, created in 1913 by Wall Street bankers, was not initially global in nature. She was accompanied by scandals and looked very dubious. The main lobbyist for the creation of the Federal Reserve was the banker J.P. Morgan, whom the Americans politely call “the financial predator.” The lists of Fed leaders lit up the entire financial aristocracy of the early XX century.
Mellons, Warburgs, Meyers – it was a real international with business interests in all countries of the world. US presidents changed, Republicans fought Democrats, but nothing was done with these great families. Their heirs still make up the country’s political and economic elite. This is the notorious “deep state”.
In theory, the Fed was supposed to insure the American economy against crises. In fact, his first “achievement” was the closure of the New York Stock Exchange in 1914 for a record eight months. Then came the stock market crash of 1929 and the Great Depression, which brought poverty, devastation and a general famine to the Americans.
It quickly became clear how closed the Fed is. The transcripts of the 1931 congress sessions show the patriarchal simplicity with which business was conducted in the early years of its existence.
The head of the Federal Reserve, Paul Warburg, was accused of working in favor of the European branch of his family, and exactly on the eve of the collapse of 1929, he registered the American division of the German conglomerate IG Farbenindustrie and issued him $ 830 million in bonds. The head of the Federal Reserve, Eugene Meyer, according to Congressman Louis Thomas McFadden, in 1910 conspired with the banker Baruch and a French bank and began speculating in steel. Prices skyrocketed and led to a crisis in industrial production. Andrew Mellon, who served as Secretary of the Treasury from 1921 to 1931, was accused of using the Federal Reserve to develop a network of his own banks that sprawled across the country.
Many questions from the congressmen were caused by incomprehensible loans that the Federal Reserve, without the consent of the US authorities, provided to foreign countries. “Is this loan (200 million in gold provided by the Reserve Bank of New York to the Bank of England) an abuse of power?” Congressman McFadden asked his colleagues. He received no answer. An investigation into the activities of the Federal Reserve in 1931 yielded absolutely no results. What has changed since then?
Today, only academic economists are appointed as heads of the FRS. True, they often work for the largest transnational corporations. Jerome Powell, for example, worked for banks before becoming the head of the Fed, and then was a partner in the giant investment fund Carlyle Group. However, now the heads of the FRS have no right to do business and usually delegate all cases to relatives.
However, many of the 12 banks in the US Federal Reserve are still run by oligarchs. Heir to a family of oil billionaires, Hunt headed the federal bank in Dallas from 2002 to 2006. Billionaire Robert Kraft served on the board of governors of Boston Federal Bank. Oligarch Jerry Speyer, a relative of famous European financiers, became chairman of the board of governors of the Federal Bank of New York in 2007.
It is not surprising that all crises in the American economy are ruled by the FRS in favor of wealthy compatriots. This was the case with the dot-com bubble in 2000 and the “great recession” of 2007-2008. The Fed has the same answer to all the challenges: quantitative easing. This means that the Fed is buying up its bonds, and the US government is printing new trillions of dollars for this business, which allows the stock to be held high. Who wins in the end? The largest shareholders, the American oligarchy.
The crumbs from this pie go to those Americans who have free money. Those who had savings last spring were able to buy stocks that fell during the pandemic. Since then, the rate of many of them has grown exponentially. Several percent of US citizens have become wealthy. But for the vast majority of Americans, quantitative easing has brought only inflation, rising spending and impoverishment.
The strange practice of feeding foreign banks with money in the midst of all-American crises has not gone anywhere either. For example, in 2008, the Federal Reserve sponsored the British bank Barclays for $ 252 billion. Other British banks such as HSBC, Royal Banc of Scotland, Abbey National received no less generous assistance.
Senator Bernie Sanders then conducted his investigation and, as he put it, “my jaw dropped from the results.” In the midst of the “great recession”, when Americans massively went bankrupt and committed suicide, the Federal Reserve generously, heartily distributed interest-free loans to financial institutions, which were already doing very well: 600 billion – Goldman Saks, one and a half trillion – Merril Lynch, 1, 8 trillion – Citigroup, two trillion – Morgan Stanley. The financial predator J.P. Morgan died, but his business, as we see, lives on and wins.
Sanders’ investigation, as you might guess, led nowhere. Fed audit? What are you? How can you think of this? Five years ago, the same Ron Paul proposed such a bill. However, the US Congress did not support this idea.
The almighty Federal Reserve remains, in fact, the same muddy shop as it was a hundred years ago. And in exactly the same way as before, it is trying to resolve the economic crisis by “quantitative easing”. Trillions are pumped into banks again – this time under the slogan of saving Americans from the consequences of the pandemic.
“The Fed is ruining ordinary Americans, enriching the elite, increasing the national debt. It’s time to audit it and end it,” urges Ron Paul. However, even such a radical solution will not save the giant virtual bubble that the former world’s first economy has become.
The only way the Americans have to solve their economic problems is to export them. Wreak havoc around the world, plunge other countries into poverty, and then show off in their background so that everyone continues to buy the dollar. All countries embedded in the global economy are forced to follow these rules of the game, whatever it may be called – “energy transition” or “great reset”. In the coming hopelessness that our American partners are planning to arrange for all of us, only countries with stable sovereign economies have a chance of success. Such as Russia. And what will happen to the FRS – it does not matter as much as it seems to the Americans. As they opened, they will close.