Pulling a Rabbit Out of a Hat (Part I)

The Federal Reserve System is accountable to no one; it has no budget; it is subject to no audit; and no Congressional committee knows of, or can truly supervise, its operations. The Federal Reserve, virtually in total control of the nation's vital monetary system, is accountable to nobody—and this strange situation, if acknowledged at all, is invariably trumpeted as a virtue. Murray Rothbard, The Case Against the Fed (pdf), 1994, p. 3.

Relying on misdirection, a magician pulls a rabbit out of a hat--seemingly creating a rabbit out of nothing. Done well it will impress small children. But that's nothing compared to the prestidigitatorial skills of Federal Reserve bankers and the federal government as they counterfeit trillions of dollars in plain sight of Americans. Our fiat money dollars are created as if by magic. US paper money is denominated in dollars, but they're Federal Reserve Notes (FRNs) with no intrinsic value; the Fed will even tell you so.[1] Yet to date, not one banker or government official has ever been tarred and feathered for greater transgressions than those that colonial Americans believed warranted overthrow of a government.

The Bureau of Engraving and Printing prints every FRN with a portrait of a government official just as Roman emperors minted coins bearing the image of Caesar to remind servants of their master. Using misdirection, our money magicians make sure that the most common bills bear a portrait of Franklin, Washington, Jefferson, or Hamilton, men we are all taught to revere as bastions of freedom. (How much would you trust the integrity of your FRN if it had the head of Bill Clinton or Richard Nixon on it?) That one of the main reasons these founding fathers supported the Constitution was to remove power from the states for emitting worthless fiat paper money, is classic doublethink. Today's Federal Reserve exists mainly to create money out of nothing to credit the accounts of the powerful.

The word 'doublethink' is an exemplary example of its own meaning as doublethink sounds like twice as much thinking, but is in actuality the gateway to no thinking at all. Our federal government and our money system is rife with doublethink and depends on the vast majority of Americans not thinking about what's hidden up the magicians' sleeves. The magicians want to make sure that most people just clap when the rabbit appears and sip some more of their drinks. Meanwhile, the fiat money the Fed creates robs productive people by devaluing their savings.

Ron Paul (R), a true advocate of change, wants to educate Americans by getting them to think about liberty. On February 26, 2009, he introduced HR 1207: The Federal Reserve Transparency Act of 2009, a bill to audit the Federal Reserve Bank. Paul believes "the Federal Reserve in collaboration with the giant banks has created the greatest financial crisis the world has ever seen."

There are now 282 co-sponsors for the bill and the Federal Reserve chairman Bernanke is now on a publicity tour because he and those who benefit from its policies are terrified that if the bill passes, the public will know which banks are solvent and which are not. According to Gary North:

"If Congress compels a full audit – a real audit, not a FED-controlled audit – individual members of Congress will discover that the American financial system is a house of cards. A few of them will release the results of the audit to the public."

But North also explains how the co-sponsors will avoid backing the bill:

"Barney Frank understands the threat. He has bottled the bill up in committee. This way, members who support the bill can tell the folks back home that it's not their fault. If they are asked about this, they can say, one by one, 'I am really sorry. I did my best, but the bill is bottled up in committee. There is nothing I can do.'

"Of course there is something they can do. They can vote to bring the bill to the floor for a vote. There, they will be exposed to the folks back home. Did they vote 'yes' to audit the FED? By co-sponsoring the bill, they can tell the folks back home, 'I'm with you on this.' By letting Frank bottle it up in committee, they can plead powerlessness. Nice."

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[1] "Modern Money Mechanics," A publication of the Federal Reserve Bank of Chicago (pdf) From page 2:

"In the United States neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries. Coins do have some intrinsic value as metal, but generally far less than their face value.
What, then, makes these instruments - checks, paper money, and coins - acceptable at face value in payment of all debts and for other monetary uses? Mainly, it is the confidence people have that they will be able to exchange such money for other financial assets and for real goods and services whenever they choose to do so."