Is Another Shearing on the Way?

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To appreciate how we could end up in such a mess, it's important to remember who put us there. A brief summary of what is now seemingly ancient history is a good starting point.

The Federal Reserve was passed into law in the wake of the Panic of 1907. It's primary purported reason for being created was to protect the economy. Between 1923 and 1929, the newly-created Federal Reserve System expanded the money supply by a massive 62 percent. (There’s more than one reason that decade was called the Roaring Twenties.)

Because the big commercial banks and the biggest newspapers were largely owned by the same super wealthy, both encouraged borrowers to get rich on Wall Street. The stock market went up to dizzying heights.

More and more Americans climbed on board the get-rich-quick speculative train. But, like all expansions based on false economic practices, the party was about to end and the hangovers begin. For those with ears to hear, Paul Warburg — who had resigned from a $500,000 per year salary in order to become the first chairman of the Federal Reserve — gave an early warning breeze in March 1929 that the time was near for speculators to get out of the market.

Later in the year, the banks who had been issuing 24-hour broker call loans like they were water, even as latecomers piled in to get in on the game, suddenly reversed their direction and began calling all of the loans in. Highly-leveraged market players liquidated as fast as they could, triggering the market's tumble. The Republicans, who were in control, were blamed for the economic crisis. A Democrat president was swept into office, and he pushed the U.S. down the socialist path of the New Deal.

The corporate magnates who were in the know went back after the dust had settled and bought up broken stocks in companies for a fraction of what they'd been worth prior to the collapse. Curtis Dall, who was a syndicate manager for Lehman Brothers, and the son-in-law of FDR, was present on the floor of the New York Stock Exchange the day the market crashed. In hindsight, he wrote:

Actually, it was the calculated "shearing" of the public by the World Money powers triggered by the planned sudden shortage of call money in the New York money market.

Yes, indeed. The sheeple got sheared by the same corporate overlords who sold them the idea of a central bank to begin with as a means of protecting the economy and smoothing out the booms and busts in the business cycle.

So, here we sit again, this time on top of the largest expanded credit and money supply bubble in the history of the world. And whether the Fed inflates or deflates, serious economic consequences will result.

Meanwhile, the European Central Bank and the U.S. Federal Reserve continue to fight over monetary strategy, with Morgan Stanley warning the Fed’s decision to loosen the currency supply more “could trigger another ‘catastrophic event’.”

Curiously, the Royal Bank of Scotland (RBS) sent one of its executives to attend the media-ignored Bilderberg conference in Chantilly, Virginia. At that confab, some 140 of the world’s elite met behind closed doors so that, according to its press release, they could “encourage frank and open discussion.”

About what? Many of us lesser mortals would like to know. After all, some of those who were in attendance were our elected representatives (remember, they report to us, not the other way around).

Did the executive(s) from the Royal Bank of Scotland go home and sound the alarm about an impending crash, a la Paul Warburg’s March 1929 signal? That remains to be seen.

Or, is something else afoot?

Now we learn Treasure Secretary Henry M. Paulson Jr. “plans to call ... for the Federal Reserve to be given new, explicit powers to intervene in the workings of Wall Street firms to protect the financial system, adapting his vision of how the financial world should be regulated to reflect the lessons of the collapse of Bear Stearns.”

In a planned speech, he was expected to say: “We should quickly consider how to appropriately give the Fed the authority to access necessary information from highly complex financial institutions and the responsibility to intervene in order to protect the system,” adding, "so they can carry out the role our nation has come to expect.”

Did the RBS sound an alarm in order to falsely scare the masses into accepting a vastly-expanded role for the Fed, giving our money masters more power and control over the economy to save it?

Regardless of why RBS sounded the alarm, the role we’ve come to expect the Fed to fulfill will only give us more of the same: massive shearing of the middle class and into the hands of the elites.

It’s long time overdue to put an end to the banksters’ games they play with our lives, dismantle the Fed, and get back to a sound currency that can’t be manipulated for their gain — and our loss.