Does the world really need another book on
the Federal Reserve System?
I have struggled with that question for several years. My own library is
mute testimony to the fact that there has been no shortage of writers
willing to set off into the dark forest to do battle with the evil
dragon. But, for the most part, their books have been ignored by the
mainstream, and the giant snorter remains undaunted in his lair.
There seemed to be little reason to think
that I could succeed where so many others have failed.
Yet, the idea was haunting. There was no doubt in my mind that the
Federal Reserve is one of the most dangerous creatures ever to stalk our
land. Furthermore, as my probing brought me into contact with more and
more hard data, I came to realize that I was investigating one of the
greatest "who-dunits" of history. And, to make matters worse, I
discovered who did it.
Someone has to get this story through to the public. The problem,
however, is that the public doesn't want to hear it. After all, this is
bad news, and we certainly get enough of that as it is.
Another obstacle to communication is that this tale truly is incredible,
which means unbelievable. The magnitude by which reality deviates from
the accepted myth is so great that, for most people, it simply is beyond
credibility. Anyone carrying this message is immediately suspected of
paranoia. Who will listen to a madman?
And, finally, there is the subject matter itself. It can become pretty
complex. Well, at least that's how it seems at first. Treatises on this
topic often read like curriculum textbooks for banking and finance. It
is easy to become ensnared in a sticky web of terminology and
abstractions. Only monetary professionals are motivated to master the
new language, and even they often find themselves in serious
disagreement.
For example, in a recent letter circulated
by a group of monetary experts who, for years, have conducted an ongoing
exchange of ideas regarding monetary reform, the editor said:
"It is frustrating that we cannot find
more agreement among ourselves on this vital issue. We seem to
differ so much on definitions and on, really, an unbiased, frank,
honest, correct understanding of just how our current monetary
system does function".
So why am I now making my own charge into
the dragon's teeth?
It's because I believe there is a definite
change in the wind of public attitude. As the gathering economic storm
draws nearer, more and more people will tune into the weather report -
even if it is bad news. Furthermore, the evidence of the truth of this
story is now so overpowering that I trust my readers will have no choice
but to accept it, all questions of sanity aside. If the village idiot
says the bell has fallen from the steeple and comes dragging the bell
behind him, well,...
Lastly, I have discovered that this subject is not as complicated as it
first appeared to be, and I am resolved to avoid the pitfall of trodding
the usual convoluted path. What follows, therefore, will be the story of
a crime, not a course on criminology.
It was intended that this book would be half its present size and be
completed in about one year. From the beginning, however, it took on a
life force of its own, and I became but a servant to its will. It
refused to stay within the confines prescribed and, like the genie
released from its bottle, grew to enormous size. When the job was done
and it was possible to assess the entire manuscript, I was surprised to
realize that four books had been written instead of one.
First, there is a crash course on money, the basics of banking and
currency. Without that, it would be impossible to understand the fraud
that now passes for acceptable practice within the banking system.
Second, there is a book on how the world's central banks - the
Federal Reserve being one of them - are catalysts for war. That is what
puts real fire into the subject, because it shows that we are dealing,
not with mere money, but with blood, human suffering, and freedom
itself.
Third, there is a history of central banking in America. That is
essential to a realization that the concept behind the Federal Reserve
was tried three times before in America. We need to know that and
especially need to know why those institutions were eventually junked.
Finally, there is an analysis of the Federal Reserve itself and its
dismal record since 1913. This is probably the least important part of
all, but it is the reason we are here. It is the least important, not
because the subject lacks significance, but because it has been written
before by writers far more qualified and more skilled than I. As
mentioned previously, however, those volumes generally have remained
unread except by technical historians, and the Creature has continued to
dine upon its hapless victims.
There are seven discernible threads that are woven throughout the fabric
of this study. They represent the reasons for abolition of the Federal
Reserve System. When stated in their purest form, without embellishment
or explanation, they sound absurd to the casual observer. It is the
purpose of this book, however, to show that these statements are
all-too-easy to substantiate.
The Federal Reserve System should be abolished for the following
reasons:
-
It is incapable of accomplishing its
stated objectives. (Chapter 1.)
-
It is a cartel operating against the
public interest. (Chapter 3.)
-
It is the supreme instrument of
usury. (Chapter 10.)
-
It generates our most unfair tax.
(Chapter 10.)
-
It encourages war. (Chapter 14.)
-
It destabilizes the economy.
(Chapter 23.)
-
It is an instrument of
totalitarianism. (Chapters 5 and 26.)
This is a story about limitless money and
hidden global power. The good news is that it is as fascinating as any
work of fiction could be, and this, I trust, will add both pleasure and
excitement to the learning process.
The bad news is that every detail of what follows is true.
G. Edward Griffin
Q. What are banks for?
A. To make money.
Q. For the customers?
A. For the banks.
Q. Why doesn't bank advertising mention
this?
A. It would not be in good taste. But it is mentioned by implication
in references to reserves of $249,000,000 or thereabouts. That is
the money that they have made.
Q. Out of the customers?
A. I suppose so.
Q. They also mention Assets of
$500,000,000 or thereabouts. Have they made that too?
A. Not exactly. That is the money they use to make money.
Q. I see. And they keep it in a safe
somewhere?
A. Not at all. They lend it to customers.
Q. Then they haven't got it?
A. No.
Q. Then how is it Assets?
A. They maintain that it would be if they got it back.
Q. But they must have some money in a
safe somewhere?
A. Yes, usually $500,000,000 or thereabouts. This is called
Liabilities.
Q. But if they've got it, how can they
be liable for it?
A. Because it isn't theirs.
Q. Then why do they have it?
A. It has been lent to them by customers.
Q. You mean customers lend banks money?
A. In effect. They put money into their accounts, so it is really
lent to the banks.
Q. And what do the banks do with it?
A. Lend it to other customers.
Q. But you said that money they lent to
other people was Assets?
A. Yes.
Q. Then Assets and Liabilities must be
the same thing?
A. You can't really say that.
Q. But you've just said it. If I put
$100 into my account the bank is liable to have to pay it back, so
it's Liabilities. But they go and lend it to someone else, and he is
liable to have to pay it back, so it's Assets. It's the same $100,
isn't it?
A. Yes. But...
Q. Then it cancels out. It means,
doesn't it, that banks haven't really any money at all?
A. Theoretically....
Q. Never mind theoretically. And if they
haven't any money, where do they get their Reserves of $249,000,000
or thereabouts?
A. I told you. That is the money they have made.
Q. How?
A. Well, when they lend your $100 to someone they charge him
interest.
Q. How much?
A. It depends on the Bank Rate. Say five and a-half per cent. That's
their profit.
Q. Why isn't it my profit? Isn't it my
money?
A. It's the theory of banking practice that...
Q. When I lend them my $100 why don't I
charge them interest?
A. You do.
Q. You don't say. How much?
A. It depends on the Bank Rate. Say half a per cent.
Q. Grasping of me, rather?
A. But that's only if you're not going to draw the money out again.
Q. But of course, I'm going to draw it
out again. If I hadn't wanted to draw it out again I could have
buried it in the garden, couldn't I?
A. They wouldn't like you to draw it out again.
Q. Why not? If I keep it there you say
if s a Liability. Wouldn't they be glad if I reduced their
Liabilities by removing it?
A. No. Because if you remove it they can't lend it to anyone else.
Q. But if I wanted to remove it they'd
have to let me?
A. Certainly.
Q. But suppose they've already lent it
to another customer?
A. Then they'll let you have someone else's money.
Q. But suppose he wants his too ... and
they've let me have it?
A. You're being purposely obtuse.
Q. I think I'm being acute. What if
everyone wanted their money at once?
A. It's the theory of banking practice that they never would.
Q. So what banks bank on is not having
to meet their commitments?
A. I wouldn't say that.
Q. Naturally. Well, if there's nothing
else you think you can tell me...?
A. Quite so. Now you can go off and open a banking account.
Q. Just one last question.
A. Of course.
Q. Wouldn't I do better to go off and
open up a bank?