Back when I still used to watch TV – back when Greenspan was still Fed Chairman - CNBC used to focus on the size of his briefcase going into the meeting as an “indicator” as to which way interest rates would go. Why the public needs to speculate on such important decisions in our Republic remains a mystery to me. This kind of tittytainment is one of the main reasons television has become so ridiculous to millions of Citizens who now independently seek out our news on the net. Tittytainment is certainly not conducive to explaining the sinister relationship between the Federal Reserve and the IRS, so thank God for YouTube! Let’s take a look at the first 30 seconds of this compilation of a conversation between Aaron Russo and Ron Paul:
Aaron Russo: So the Federal Reserve is actually an illegal entity functioning within the government.
Ron Paul: It is illegal. And what we have given to this so-called agency is the authority to counterfeit money.
Aaron Russo: Do you have any points of view about the Federal Reserve and how the Federal Reserve operates?
Ron Paul: They just enter something on a computer. “Oh, you need $20 billion today? Well, here’s $20 billion.” But they got that out of thin air. It came out of thin air. It goes to the Treasury, and the Treasury then pays the bills.
We have already seen how this process is inflationary. However, the relationship to the IRS is a little less clear, so let’s tease it out: Congress formerly had the power to coin money, but it delegated that power to the Federal Reserve in 1913. When The Fed creates that $20 billion out of thin air, it doesn’t give the money to the Treasury – it loans it to the Treasury. There is a huge difference.
In exchange for the loan, the Treasury gives the Fed collateral: $20 billion worth of Treasury bonds (T-bonds). But as we all know, T-bonds are not simply static collateral, T-bonds also pay interest to the holder. In this case, the holder is the Federal Reserve.
But where does the Treasury get the extra money required to pay the interest back to the Fed? The Fed didn’t create the interest – it only created enough money for the face value of the bond. If the T-bonds pay 5% interest, the Treasury needs to come up with an additional $1 billion each year to pay the interest back to the Fed! Where do they get it?
You guessed it, friends! It comes from you – the generous American Taxpayer. The IRS – also founded in 1913 - was part of a package deal. It is required in order to raise the money to pay back the interest on the money the Treasury “borrowed” from the Federal Reserve.
You didn’t know that? Now you know why Henry Ford said, “It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” And you also now know why Dr. Ron Paul is so vehemently opposed to both the Fed and the IRS.
Closing Note
The wide range of positive feedback that the first article in this series was encouraging, and the note from Simon Constable was surprising. Simon asked me where I was based. While I live in Boston, I’m actually based at my kitchen table, though from time to time (such as last week) I do venture out into the Peanut Gallery. I mention this only as a way of conveying to you, dear reader, just how fluid and new the times are that we are living in today.
When a guy reporting from his kitchen table can access and share this range of information with tens of thousands of readers using the same platform as multimillion-dollar news outlets, real change can (and I dare say will) happen. In addition to being a presidential campaign, Ron Paul’s candidacy is also an educational one, and each day more and more people are getting informed about issues they hadn’t even heard about last week! Information that was previously almost secret is now working its way out into the daylight, and a huge younger generation is on the rise.
Things are far from static, friends! Hold on to your hats - we’re in for a wild ride in the months and years ahead.
Back when I still used to watch TV
