RE: [CANSLIM] Hangover (was OT 7)

From: "Rocky Sanghvi" <rs@mylodestar.com>
Subject: RE: [CANSLIM] Hangover (was OT 7)
Date: Tue, 29 Oct 2002 20:50:48 -0500
Next Article (by Author): RE: [CANSLIM] OT 7 "Rocky Sanghvi"
Previous Article (by Author): RE: [CANSLIM] Hangover (was OT 7) "Rich Mau"
Top of Thread: RE: [CANSLIM] Hangover (was OT 7) "Rich Mau"
Articles sorted by: [Date] [Author] [Subject]
Not to create a lasting hangover but the repertoire of central bank
intrigue, speculative bubbles, defaults, devaluations, bank rate
manipulations, deflations and inflations constitute the essential
arsenal being used by economic warfare planners today.

Excerpted from AGAINST 
OLIGARCHY
Essays & speeches
1970-1996
by
Webster G. Tarpley

PART 7 (Excerpt)

THE FEDERAL RESERVE: CAUSE OF DEPRESSION 

One of the main causes for the Great Depression was the Federal Reserve
System of the United States. Many naive persons think of the Federal
Reserve System as a part of the United States government, which it
emphatically is not. Probably this is because the only money we have
nowadays is marked "Federal Reserve Note." The Federal Reserve is a
privately owned and privately managed institution. Those who can
remember the 1960's can recall that there were one dollar silver
certificates as well as United States Notes, the descendants of
Lincoln's greenbacks, in several denominations. But after the Kennedy
assassination, the private Federal Reserve established a monopoly on
printing American money, shutting out the US Federal Government from
this important function. 

In this way the Federal Reserve System violates the letter and spirit of
the United States Constitution. There, in Article I, Section 8, Clause 5
we read that the Congress shall have the power "to coin money, regulate
the value thereof, and of foreign coin, and fix the standard of weights
and measures." 

The Federal Reserve was created in December, 1913 when Woodrow Wilson
signed the Glass-Owen Federal Reserve Act. That bill had been the
product of cloak-and-dagger machinations by Wall Street financiers and
their political mouthpieces, many of them in league with the City of
London. Wall Streeter Frank A. Vanderlip, in his autobiography "From
Farm Boy to Financier" narrates that the secret conference which planned
the Federal Reserve was "as secret - indeed, as furtive - as any
conspirator." Vanderlip was one of the insiders invited to the Jekyl
Island Club on the coast of Georgia in the autumn of 1910 by the Senator
Nelson Aldrich, the father-in-law of John D. Rockefeller Jr. Aldrich
also invited Henry Davison of J.P. Morgan & Co., and Benjamin Strong,
the future Governor of the New York Federal Reserve Bank. Also on hand
was Paul Warburg of the notorious international banking family,
descended from the Del Banco family of Venice. As Vanderlip recounted,
"We were instructed to come one at a time and as unobtrusively as
possible to the railway terminal on the New Jersey littoral of the
Hudson, where Senator Aldrich's private car would be in readiness,
attached to the rear end of a train for the South." 

On Jekyl Island this crew began to decide the main features of the
central bank of the United States: "We worked morning, noon, and
night....As we dealt with questions I recorded our agreements...If it
was to be a central bank, how was it to be owned - by the banks, by the
Government or jointly ? When we had fixed upon bank ownership and joint
control, we took up the political problem of whether it should be a
number of institutions or only one." In the end, says Vanderlip, "there
can be no question about it: Aldrich undoubtedly laid the essential,
fundamental lines which finally took the form of the Federal reserve
law." 

Today each of the twelve Federal Reserve Banks - Boston, New York,
Chicago, San Francisco, and so forth - is a private corporation. The
shares are held by the member banks of the Federal Reserve System. The
Class A and Class B Directors of each Federal reserve Bank are elected
by the shareholders from among bankers and the business community, and
other Directors are appointed by the Federal Reserve Board in
Washington. 

Members of the Board of Governors of the Federal Reserve System in
Washington are chosen by the President and must be approved by the
Senate, for what that is worth. But when we come to the vital Federal
Reserve Open Market Committee, which sets short-term interest rates and
influences the size of the money supply by buying or selling government
securities, the picture is even worse. The FOMC comprises 7 Fed
Governors from Washington plus 5 presidents of Federal Reserve Banks
appointed by the respective Directors of these banks. In practice, 5
Federal Reserve district presidents who have never been seen by the
President or the Congress have a vote on setting the credit policy and
money supply of the United States. Public policy is made by a private
cabal of self-appointed plutocrats. 

How was this sleazy product marketed to the Congress ? Interestingly,
the Congressmen were told that the Federal Reserve System would prevent
panics and depressions like those of the 1870's and 1890's. Here is a
sampling compiled by Herbert Hoover of selling points used by lobbyists
seeking votes for the Federal Reserve Act: 

We shall have no more financial panics....Panics are
impossible....Business men can now proceed in effect confidence that
they will no longer pu their property in peril....Now the business man
may work out his destony without living in terror of panic and hard
times....Panics in the future are unthinkable....Never again can panic
come to the American people.

[The Memoirs of Herbert Hoover, p.7] 

The verdict of history must be that the Federal Reserve has utterly
failed to deliver on these promises. The most potent political argument
against this arrangement is that it has been a resounding failure. Far
from making financial crises impossible, the Fed has brought us one
Great Depression, and it is about to bring us a super-depression, a
worldwide disintegration. 

The Federal Open Market Committee was not part of the original
legislation that created the Federal Reserve System. But in the early
1920's, some regional Federal Reserve Bank presidents, inevitably
dominated by New York, formed a committee outside of any law to
coordinate their activities in determning the money supply and interest
rates through buying and selling of government securities - i.e., open
market operations. This was a very successful power grab by the regional
Reserve Bank leaders, all directly chosen by bankers and the private
sector, and not subject to approval by anyone in Washington. In 1935
Franklin D. Roosevelt very unwisely signed a Banking Act which legalized
the Federal Open Market Committee in its present form, with a formal
majority for Federal Reserve Board Governors in Washington, the ones
proposed by the President and approved by the Senate. But at the same
time the Secretary of the Treasury, who used to be a member of the
central Board, was ousted from that position. 

If you're interested in more of this please send me a separate email or
search the net.  

Best Wishes,
Rocky


- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com] On Behalf Of Rich Mau
Sent: Tuesday, October 29, 2002 7:14 PM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] Hangover (was OT 7)

I agree with you, particularly about blame.

It would be nice if it were really Greenspan's fault (or the Democrat's
fault or the Republican's fault, or .  .  .).   Then we could just
change
that person (or group) and all would be "fixed".  But rather a whole
bunch
responsible people (some of which are looking at a computer screen right
now) did things that were ,at least in hindsight, not very wise.

Now we have the morning-after hangover while looking for someone to
blame.

Rich

> -----Original Message-----
> From: owner-canslim@lists.xmission.com
> [mailto:owner-canslim@lists.xmission.com]On Behalf Of Mike Gibbons
> Sent: Tuesday, October 29, 2002 2:34 PM
> To: canslim@lists.xmission.com
> Subject: RE: [CANSLIM] OT 7
>
>
> Hi Rich,
.  .  .
> But ultimately, the fault lies with us. We get the government (and
> oversight) we vote for, and if we are foolish enough to buy a stock at
500
> times earnings, because we believe in the greater fool theory,
> then we only
> have ourselves to blame when the bubble bursts. (No one in this group
of
> course).
.  .  .
> Mike Gibbons


- -
- -To subscribe/unsubscribe, email "majordomo@xmission.com"
- -In the email body, write "subscribe canslim" or
- -"unsubscribe canslim".  Do not use quotes in your email.


- -
- -To subscribe/unsubscribe, email "majordomo@xmission.com"
- -In the email body, write "subscribe canslim" or
- -"unsubscribe canslim".  Do not use quotes in your email.
Go to Jeff Salisbury LWGate Home Page.