Why do we virtually whisper in banks?
“In God We Trust” takes on new meaning.
Solution Series article
- NLH
NOTE: MOST PHOTOS CAN BE CLICKED ON TO ENLARGE
The photograph above is of the UNITED STATES TREASURY. That is where our story starts in 1913. A series of financial panics terrified the sitting Congress into passing The Federal Reserve Act (12/23/ 1913) signed into law by President Wilson. While the TREASURY would continue to collect Federal Taxes and print currency, the actual management of the economy would fall to the newly established central bank called the Federal Reserve.
The photograph above is of the UNITED STATES TREASURY. That is where our story starts in 1913. A series of financial panics terrified the sitting Congress into passing The Federal Reserve Act (12/23/ 1913) signed into law by President Wilson. While the TREASURY would continue to collect Federal Taxes and print currency, the actual management of the economy would fall to the newly established central bank called the Federal Reserve.
Manipulation of the flow of money and regulating banking activities would stabilize the economy. This would be accomplished by a Central Bank managing the U.S. Financial System. The ultimate problem with the plan is that this Central Bank is a totally independent company. Former Federal Reserve Chairman Alan Greenspan put it this way, “Well, first of all, the Federal Reserve is an independent agency. And that means basically that, uh, there is no other agency of government which can overrule actions that we take.”
So the “FED” can do anything it wants to. Better think about that one. The FED can do anything it wants to like secretly lending out 16.1 trillion dollars to banks worldwide, between 2007 to 2010. This figure comes from the government’s first-ever audit of the central bank in 2011. More on this below.
Back to the system: To manage and regulate the vast landscape of financial institutions, the Federal Reserve System utilizes 12 District Banks overseeing designated geographic areas. Within their specific districts, each District Bank is responsible for member banks located in its district.
So the “FED” can do anything it wants to. Better think about that one. The FED can do anything it wants to like secretly lending out 16.1 trillion dollars to banks worldwide, between 2007 to 2010. This figure comes from the government’s first-ever audit of the central bank in 2011. More on this below.
Back to the system: To manage and regulate the vast landscape of financial institutions, the Federal Reserve System utilizes 12 District Banks overseeing designated geographic areas. Within their specific districts, each District Bank is responsible for member banks located in its district.
These 12 banks oversee the FED Member Banks. The biggest financial institutions (Holding Companies) include those “Too Big To Fail”. Any Federally Charted privately owned bank must be a FED Member Bank. And upon fulfilling certain requirements, State Chartered Banks can be member banks.
Just take a moment and look at these buildings. Damn impressive, I would say. But even in this small, old bank we take on the same quiet, somber demeanor upon entering the building. We virtually whisper in a bank. Where do we also take on this humble and respectful attitude? Well a church, of course.
And that is not the only similarity between a religious cathedral and a financial cathedral. Both require faith to maintain their continued existence. There is not a religion in existence that can survive without the faith of the congregation. And in the case of the Federal Reserve System, should its congregation loose faith, the system would also crumble.
And that is not the only similarity between a religious cathedral and a financial cathedral. Both require faith to maintain their continued existence. There is not a religion in existence that can survive without the faith of the congregation. And in the case of the Federal Reserve System, should its congregation loose faith, the system would also crumble.
The American Heritage Dictionary defines a bank as “A business establishment in which money is kept for saving or commercial purposes or is invested, supplied for loans, or exchanged.” But in the case of the Federal Reserve System, this definition does not apply, as it implies “money is kept”.
In fact, only a fraction of the money deposited in a bank is actually maintained in the vaults. A certain percentage of deposited money is kept, but the vast amount is “spent” or loaned out in exchange for interest on the loan. This is called “fractional-reserve banking” and is the world standard operation for banks. Its success depends upon the customers believing that at any given minute, the amount of money being held in reserve is sufficient to allow the customer to access THEIR money. If everyone asked for their money back at the same time (a bank run), there would not be sufficient cash on hand.
Should a bank run happen to a FED Member Bank, the FED District Bank would attempt to cover the on hand shortage. If the District Bank level could not cover the loss, the Central Bank would have the U.S. Treasury print some more paper to be sent to fill the financial hole. After all, it is only paper. It is not like the Central Bank had to back the paper with anything other than the faith of the congregation.
In fact, only a fraction of the money deposited in a bank is actually maintained in the vaults. A certain percentage of deposited money is kept, but the vast amount is “spent” or loaned out in exchange for interest on the loan. This is called “fractional-reserve banking” and is the world standard operation for banks. Its success depends upon the customers believing that at any given minute, the amount of money being held in reserve is sufficient to allow the customer to access THEIR money. If everyone asked for their money back at the same time (a bank run), there would not be sufficient cash on hand.
Should a bank run happen to a FED Member Bank, the FED District Bank would attempt to cover the on hand shortage. If the District Bank level could not cover the loss, the Central Bank would have the U.S. Treasury print some more paper to be sent to fill the financial hole. After all, it is only paper. It is not like the Central Bank had to back the paper with anything other than the faith of the congregation.
The concept paper currency would indicate a certain amount of gold and/or silver could be exchanged for the paper currency has long been gone. Executive Order 6102 signed on April 5, 1933 by U.S. President Franklin D. Roosevelt forbid "the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States". The order actually criminalized possession of monetary gold by any individual, partnership, association or corporation. Just under a year later,
The United States Gold Reserve Act ordered all gold and gold backed certificates held by the Federal Reserve be surrendered to the U.S. TREASURY. The gold was sent to Fort Knox and other locations.
The United States Gold Reserve Act ordered all gold and gold backed certificates held by the Federal Reserve be surrendered to the U.S. TREASURY. The gold was sent to Fort Knox and other locations.
From then on a U.S. dollar was printed paper with an intrinsic value equivalent to Monopoly Money. The only thing making the FED work is that everyone went on playing the game and following the rules. Everyone continued pretending a dollar was worth something. Faith is an amazing and powerful pillar of “reality”.
Here is another view of reality. This chart demonstrates how the purchasing power of the American dollar has continued to decline. Note specifically the continuing fall after 1950. The crashing value of the dollar had been ongoing since the FED came into existence. The economy was not going into financial panic but the dollar was on a continuing decline in value.
Then in 1956 something was added to the printed paper called U.S. Currency. "In God we trust" was adopted as the official motto of the United States and since 1957 has been added to all U.S. paper currency. The new motto invoking God replaced the unofficial motto of the American Republic since the adoption of the Great Seal of the United States in 1782. The old motto was “E pluribus unum”, Latin for "Out of many, one".
Why this change was made is really conjecture. But it certainly fit, didn’t it? The funny money was backed by God. Have faith. It works. Do not worry. Continue to whisper in the lobbies of the financial cathedrals. God is there with you. It says so on the paper everyone wants. But the dollar’s value continues to decline. Faith in the dollar worldwide has waned.
So what if we all just gave up the game? What if something breaks our blind faith and we demand a change. Or what if the entire house of cards comes down from its own weight. What then? Shall we allow the FED to bail out the entire system again as it did between 2007 and 2010? No! We fell for that already and is one of the reasons our faith is waning. No, at that point we can put the old motto back on the currency “Out of many, one”.
If it all comes crumbling down, the cathedrals will still be standing. The people will still know how to do their jobs. The electronic records of accounts will survive. The U.S. Treasury can still print the paper. All that is required is a new concept of faith. No fear. No drama. The only change would be who gets the profit a bank makes from interest.
And I can hear you screaming and grumbling, “Not possible. Too big to fail. Etcetera.” And can you hear my laughter? My friends, when it all began coming a part, before the FED came in and propped up the banks all over the world to the tune of 16.1 trillion dollars, before the “Great Recession” there was a bank that was not part of the system.
Then in 1956 something was added to the printed paper called U.S. Currency. "In God we trust" was adopted as the official motto of the United States and since 1957 has been added to all U.S. paper currency. The new motto invoking God replaced the unofficial motto of the American Republic since the adoption of the Great Seal of the United States in 1782. The old motto was “E pluribus unum”, Latin for "Out of many, one".
Why this change was made is really conjecture. But it certainly fit, didn’t it? The funny money was backed by God. Have faith. It works. Do not worry. Continue to whisper in the lobbies of the financial cathedrals. God is there with you. It says so on the paper everyone wants. But the dollar’s value continues to decline. Faith in the dollar worldwide has waned.
So what if we all just gave up the game? What if something breaks our blind faith and we demand a change. Or what if the entire house of cards comes down from its own weight. What then? Shall we allow the FED to bail out the entire system again as it did between 2007 and 2010? No! We fell for that already and is one of the reasons our faith is waning. No, at that point we can put the old motto back on the currency “Out of many, one”.
If it all comes crumbling down, the cathedrals will still be standing. The people will still know how to do their jobs. The electronic records of accounts will survive. The U.S. Treasury can still print the paper. All that is required is a new concept of faith. No fear. No drama. The only change would be who gets the profit a bank makes from interest.
And I can hear you screaming and grumbling, “Not possible. Too big to fail. Etcetera.” And can you hear my laughter? My friends, when it all began coming a part, before the FED came in and propped up the banks all over the world to the tune of 16.1 trillion dollars, before the “Great Recession” there was a bank that was not part of the system.
That bank is the Bank of North Dakota. As the Huffington Post starts off its article: The Bank of North Dakota serves as an economic development agency and "banker's bank" that lessens the loan risks of private banks and helps them finance larger projects. It offers cheap loans to farmers, students and businesses.”
By acting as a mini-FED, the bank has on hand most of North Dakota’s state funds that can be tapped into to provide short term loans for private banks that may have run into trouble. The major impact for North Dakota is the bank’s willingness to take an active role in local economic development projects. In fact the bank spends a larger proportion of their loans inside the state than a typical bank. During the last decade the Bank of North Dakota gave the state almost $300 million from its profits. And North Dakota did not participate in the recessionary economy that began in 2007. How much the bank had to do with this is debated. The fact it was a major help in insulating the State from the recession is not disputed.
What is most ironic is the history of how the Bank of North Dakota came into being. The Bank’s President Eric Hardmeyer related the history this way:
What is most ironic is the history of how the Bank of North Dakota came into being. The Bank’s President Eric Hardmeyer related the history this way:
Eric Hardmeyer: It was created 90 years ago, in 1919, as a populist movement swept the northern plains. Basically it was a very angry movement by a large group of the agrarian sector that was upset by decisions that were being made in the eastern markets, the money markets maybe in Minneapolis, New York, deciding who got credit and how to market their goods. So it swept the northern plains. In North Dakota the movement was called the Nonpartisan League, and they actually took control of the legislature and created what was called an industrial program, which created both the Bank of North Dakota as a financing arm and a state-owned mill and elevator to market and buy the grain from the farmer. And we’re both in existence today doing exactly what we were created for 90 years ago. Only we’ve morphed a little bit and found other niches and ways to promote the state of North Dakota. (Source http://www.huffingtonpost.com/)
So here is the first home for this bank of the people. Not much of a church, never mind a cathedral. But it was a bank that was concerned with its congregation. And even the current cathedralesque headquarters for BND is still focused on the citizens of North Dakota. It simply is a bank of the people, by the people and for the people. It is still a faith based enterprise, but in this case it is the people believing in the bank and the bank believing in the people.
So the next time someone tries to make you afraid of banks failing, remember that is not a bad thing. It is an opportunity to reevaluate the concept of what a bank should be and to build a new financial system based upon “E pluribus unum”. And remember the people of North Dakota who saw a wrong and had the courage and innovation to make a change that has passed many tests including Time and the Great Recession.
REFERENCES:
►Mother Jones did this Mach 2009 article
►Huffington Post from May 2013
►Here is a Newsletter providing much more information on public vs private banking
►and for more...Search "Bank of North Dakota.
►to find out more about the audit of the FED, do a search "audit of the FED"
►Mother Jones did this Mach 2009 article
►Huffington Post from May 2013
►Here is a Newsletter providing much more information on public vs private banking
►and for more...Search "Bank of North Dakota.
►to find out more about the audit of the FED, do a search "audit of the FED"
BOOKS BY N.L. Hopkins:
Because all the nonfiction books of facts regarding the epic lie of 9/11 had failed to awaken the American People, this novel was written. It is hoped a story of intrigue and adventure would allow the average reader to consider what REALLY happened on that horrific day.
Available from Amazon
FREE PDF BOOK:
Cosmic Reality -
The John Kennedy - Jesus Christ Connection
relates experiences in my search for the true Reality.
Along with dissecting the Matrix, I realized the Rules of
Cosmic Reality that will allow you to become empowered.
Because all the nonfiction books of facts regarding the epic lie of 9/11 had failed to awaken the American People, this novel was written. It is hoped a story of intrigue and adventure would allow the average reader to consider what REALLY happened on that horrific day.
Available from Amazon
FREE PDF BOOK:
Cosmic Reality -
The John Kennedy - Jesus Christ Connection
relates experiences in my search for the true Reality.
Along with dissecting the Matrix, I realized the Rules of
Cosmic Reality that will allow you to become empowered.