Text Box: This is a continuation of the Federal Reserve Boards’ web site answer to the question about its responsibilities. It’s a four-part answer. The first part included monetary policy and that subject took all of Chapter five and six to respond to. The following three parts of Fed responsibilities are addressed in this chapter. What are the Federal Reserve's responsibilities? (Part 2) Today, the Federal Reserve's responsibilities fall into four general areas: Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers. Protect Credit Rights of Sub-Prime Consumers Actually, as I write, there is talk on the news about the Board of Governors adding regulations to protect us against the calamity known as Sub-Prime. The Chairman Governor says new regulations are needed to prevent this from happening again. My position is we need a new Chairman Governor to prevent this from happening again. The Federal Reserve Board of Governors is guilty of creating homeless families with their monetary policy. The big topic today is Sub-Prime Mortgage holders have ruined the economy and more regulations are needed to protect us from these greedy families. The term Sub-Prime refers to a person’s credit score. The term Prime refers to the prime rate of interest. The prime rate is the lowest interest rate offered by a financial institution. People who are offered the low prime rate have the highest credit score. If a person’s credit score is below the target credit score needed to qualify for the prime rate, then that person has a Sub-Prime credit score and has to pay a higher rate of interest. Any person or company who pays an interest rate higher than the Prime rate can be called Sub-Prime. This category includes me. Most interest rates are Prime plus two, three or four percent. Almost all of us in the United States are Sub-Prime. An adjustable rate mortgage (ARM) means the interest rate goes up as the prime rate of interest goes up. There is never a point when the ARM interest rate is below the prime rate of interest. If the prime rate of interest goes up then the monthly payment for Adjustable Rate Mortgages goes up and that’s what hurts families with an ARM. The Board of Governors has full control of interest rates because they are pegged to each other. Each level of interest builds in a profit margin for each level of banking. The ARM interest is pegged to Prime, which is pegged to the Discount Rate. As the Federal Reserve Act states the Board of Governors determines the “rates of discount to be charged by the Federal Reserve banks” Open Market Operations, Rates of Discount Sec.14 (d) To establish from time to time, subject to review and determination of the Federal Reserve Board, rates of discount to be charged by the Federal reserve bank for each class of paper, which shall be fixed with a view of accommodating commerce and business” In May 2004 the Discount rate was two percent (2.00%). The Board of Governors stepped up the discount rate seventeen times in twenty-four months to six point two-five percent (6.25%) in June 2006. That was more than a three-time increase in rates and the six point two-five percent (6.25%) discount rate was stable for fifteen months until August 17, 2007. Then the discount rate backed down in eight months to two point two-five (2.25%) April 30, 2008. The Discount rate step-up and plateau at six point two-five percent for fifteen months increased monthly payments of adjustable rate mortgages by hundreds of dollar. The Sub-Prime families with adjustable rate mortgages were pushed out of their homes. The reason the Board of Governor gives for increasing the Discount Rate is they were fighting inflation. Their interest raising actions didn’t work because the Bureau of Labor Statistics says the Consumer Price Index went up twelve percent from one hundred eighty-four dollars ($184) to two hundred seven ($207) in the same period. My request to the Board of Governors is, “May I see the math you used as the basis for your decision to raise interest rates? What is your equation to calculate Expected Future Inflation? As with all sciences and math the calculation must be reproducible. This means someone else has to use the same data and come up with the same answer for a PhD’s answer to be considered credible. I know the Chairman Governor doesn’t have a calculation. I learned that fact while earning my bachelors of business administration in finance. I spent thousands of dollar to learn “expected inflation” can’t be calculated which means the monetary system is not understood by PhD’s. If you detect a negative attitude and a bias, this is the reason. Our world is based on numbers but PhD’s of macroeconomics and finance can’t do the numbers on a man-made system based on numbers, that’s bull. In 2004 the Board of Governors raised interest rates in steps that resulted in ARM mortgage payments stepping up hundreds of dollars. Interest rates stepped up to the point of forcing families to default on their mortgage payments and then the rates were lowered. All the while the Board of Governors blamed working fathers and mothers for causing financial crisis in the United States. This doesn’t make any sense because the ARM is a mortgage on real estate which is land and that doesn’t just disappear. The land is still there and became the property of the Bank. The working fathers and mothers had been making payments for a couple years and those were mostly applied to interest. A family with a two thousand dollar ($2,000) a month mortgage payment paid about forty thousand dollars ($40,000) in interest in two years and then defaulted. This means the mortgage company received the forty thousand dollars ($40,000) and then got the land too. What are they bitching about? Regulating the Board of Governors The place an increase in regulations is needed is with the Board of Governors. They are independent which means the elected government has no representation. The Board of Governors raises interest rates without ratification from the elected government. The old saying was “No taxation without representation”. The new saying should be “No interest rate increase without representation”. The freedom to seesaw interest rates allows them to manipulate the public. One area is retirement funds. The public has been shifted from safety of professionally managed and controlled company retirement to self directed. Everyone said to put your retirement money in mutual funds and then the mutual funds lost money. Then everyone said to shift into real estate and now real estate lost money. Those with ARM’s really paid the price trying to protect their retirement fund. One of the problems with the recent real estate situation has to do with the Board of Governors being very liberal with the Reserve Bank “Discount Window”. They are more liberal with the loans they will buy. They also opened the “Discount Window” to companies that are not banks. These companies originated loans and sold them to the Reserve Banks at discount. These companies competed with traditional banks. An argument can be made that the recent Board of Governors “bailouts” would not have been necessary if the Board of Governors was required to ratify its decisions with the elected government. Technically speaking the stockholders of the five certificates got a lot of property real cheap. It was no problem for them because they wrote a check for “actually existing values”. Regulating Banking Institutions I see no need to increase banking regulations on Member banks. Our neighborhood banks are already hog-tied and have been forced to write-off loans they didn’t want to. As Chairman Governor I will not seek to hog-tie Member banks any further nor will I relax the hold the Fed has on them. Sorry, Member banks, but I think you folks are doing a good job with all the limits you have. If I stabilize the Discount Rate at one point five for five, peg the Fed funds rate a point below and reduce new entrants into your market, I believe you will be profitable and helpful to your clientele. The neighborhood bankers I know are good, hard working people and they really care about other folks. What are the Federal Reserve's responsibilities? (Part 3) 3. Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets. Systemic risk is risk in the economy as a whole. There are two main systemic risks to address. The first is the tendency of the Board of Governors to change the “discount rate” all the time. The ups and downs of the “discount rate” are the main source of the ups and downs of the business cycle. The population is always trying to survive the next rate change. The excuse used to justify the rate changes is inflation. Inflation is the second systemic risk. The Board of Governors is forever fighting inflation and loosing. They have convinced us that we are the problem. The population is just too unpredictable and demanding. Although an individual may be unpredictable, the population is very predictable. Statistically speaking, a survey and opinion poll of four hundred people can predict how an election will turn out with a ninety percent confidence interval. It’s hard to be unpredictable in the market place. Either a product or service is there or it is not. We can complain all we want but that doesn’t change what is in the store available to purchase. It’s like the big sale at the mall or the blue light special, we rush until they run out and then we look for the next deal. If appointed Chairman Governor I will address both systematic risks. The discount rate will be stabilized at one point five percent for five years (1.5 for 5). That will reduce the cost of money and allow companies to make longer-term plans. The ability to think and act beyond the quarterly report will smooth overall business. What I expect to happen is the economy will develop some slack so every item doesn’t have to produce maximum profit every minute of the day in order for a business to survive. This will allow quality and craftsmanship to become competitive factors again. I also expect some of the cost of interest paid at every level of business to borrow legal tender documents will be routed into saving accounts. That will provide a cushion for unexpected events thus smoothing systemic risk. As for inflation, one of the solutions is to keep the National debt from growing. In preparation to be appointed Chairman Governor I have studied inflation and came up with a probability analysis. My analysis concludes that inflation has a direct correlation to National Debt. As National Debt goes up so does inflation. This makes sense because National Debt is actually new Fed notes in the form of checkbook money. This checkbook money is the Principle amount that multiplies through the “demand deposit and reserve” system to create the “credit supply”. Here is the result of my probability analysis. The Consumer Price Index (CPI) was predicted based on its dependence on the U.S. National Debt as the independent variable. The regression line was: CPI = 45.98 + (2.248-11 * National Debt), with a 99% confidence interval, also 93% of the change in CPI was related to the regression line, and a correlation coefficient, r = 0.96. It can’t be said that this line fits like a glove, but it shouldn’t fit at all. There are several ways to stabilize the dollar by stabilizing the National Debt. Actually my plan is to maintain the level of National Debt that is held by the world because the financial industry is built on it. Step one of my plan is to install the one point five for five plan to stimulate business and that will increase returns on investment which will decrease the piggy bank and export effect by pulling money already in the system out of certificates and into business investments to flowing from hand-to-hand liquidating exchanges. The increased amount of money circulating will reduce the need to borrow at all levels of production and that will reduce the cost of goods sold by reducing interest expense. Stabilizing cost will reduce inflation and that will stabilize banks so they won’t have to use the Reserve Bank’s “Discount Window”. Avoiding the “advance at discount window” will allow banks to reduce the interest rates they charge their customers. Also the Principle money supply will not shrink which allows the “demand deposit and reserve” system to keep the “credit supply” up. Step two of my plan is to make the United States of America one country with one government. An obvious benefit is to increase the income of the United States by taking profits from the Federal Reserve Stockholders. Stock in Reserve Banks held as membership fees will be not be touched. But all other stock should be condemned and procured for the benefit of the elected government of the United States by the 2008 Congress. This action should include stock from corporations affiliated with Reserve Banks, foreign branches, International Monetary Fund and the World Bank. An additional benefit is this action will reroute money that is used to buy political influence. Then congress should be able to pass the “line item veto”. That will take a few undesirable line items out of the budget. This will make it easer to balance the budget and that will reduce the need to borrow. Step three is change the mentality of the Board of Governors from supplying credit to supplying money. Credit cost interest. Money is free to flow from hand-to-hand liquidating exchanges as a “free public good”. As we saw in the Dot Com days business can be so good that tax income increases to the point of creating a budget surplus. It would also help to reduce inflation if the U.S. Dollar was stabilized with gold. Any future Treasury Notes or Bonds should be exchanged for gold is step four. Accepting a deposit in a Reserve Bank account in exchange for Treasury Bonds will no longer be acceptable. It would be a good idea for Congress to limit the amount of Central Banker’s gold allowed to leave the country. U.S. Government Financial Services What are the Federal Reserve's responsibilities? (Part 4) Providing certain financial services to the U.S. government, to the public, to financial institutions, and to foreign official institutions, including playing a major role in operating the nation's payments systems. As Chairman Governor I will maintain the current level of service. Those services include supplying money, credit, check clearing, funds transfer, data collection, statistical analysis, and the IRS. These services are part of the foundation the Federal Reserve was built on. The foundation is to advance expected future tax revenues to finance the floating National Debt and then collect the tax. That is the concept Alexander Hamilton sold to the first Congress. He followed the Bank of England corporate foundation. Although the stockholders and Board of Governors need to be replaced, I have great respect for the rest of the Federal Reserve System. The Fed is a well run and respected institution with dedicated employees and proven systems. I whole heartily expect to keep the systems, procedures, buildings, desks, staplers and employees in place. These folks have earned the respect of the world and the world’s finance depends on them. I have faith that there are employees already in the system I’m going to love working with and they’re going to be instrumental in saving the world. Foreign Government Financial Services The Board of Governors answer reveals an interesting fact. The Federal Reserve provides financial service “to foreign official institutions, including playing a major role in operating the nation's payments systems”. Dr. Econ from the San Francisco Reserve Bank says “foreign official institutions” is a foreign country’s central bank. Here is a question he answered on his web site. Dr. Econ, Which foreign entities are major holders of U.S. debt? The U.S. dollar is an international reserve currency. Most of the world’s official reserves are held in U.S. dollars. Also, because of its relative safety, foreign investors (both government and private) may choose to hold assets denominated in dollars, such as U.S. Treasury securities, to diversify their portfolios. Central banks or other monetary authorities (often called “official” foreign entities) may hold foreign exchange reserves—such as dollars—in order to influence the value of their domestic currency in the foreign exchange market. … A central bank will single out one currency (called the reserve currency) in which to hold their international reserves. It can then influence its currency’s exchange rate against the reserve currency by trading domestic money for reserve assets (Fed notes).” What benefit does the Board of Governors say the poor elected government receives by acting as the “reserve currency” for a foreign country? They say it is to finance the National Debt. The logic in the old days was for the U.S. Treasury to borrow gold from foreign countries because the Treasury needed the gold to keep the floating National Debt floating. Ever since the Federal Reserve Act the U.S. Treasury has not been receiving gold from foreign countries. The U.S. Treasury has been receiving U.S. legal tender documents called Fed notes in exchange for U.S. Treasury Notes and Bonds. Actually, the Treasury has received a deposit in a bank account which is checkbook money and that is easier to come by than Fed notes in paper form. The point is checkbook money can be made by Reserve Banks for nothing. That means the U.S. Treasury Bonds and Notes cost the Reserve Bank stockholders nothing. But then the Board of Governors allows the Reserve Banks to sell the U.S. Treasury Bonds and Notes to foreign countries for gold and foreign currency. They used the power of gold, foreign currency and U.S. Fed notes to gain enough influence to provide services to the foreign central banks. Then those countries become one country with two governments, one poor government who never has enough money and one rich independent corporate government that never runs out of money to loan. I will point out the vast foreign banking powers the Board of Governors is authorized to hand out at their discretion. But first I would like to set the stage by quoting four sections from the First Bank of the United States Act. I consider this act the view of the first U.S. Congress and President George Washington on the subject of corporate bankers and foreign governments. There is also a section on the National debt. Presidents Washington’s Foreign Business Restrictions The concept of the corporate central bank doing business in a foreign country goes against the limits established in An Act to Incorporate the Subscribers to the First Bank of the United States, 1791 First Bank Sec. 7. And be it further enacted, That the following rules, restrictions, limitations and provisions, shall form and be fundamental articles of the constitution of the said corporation, viz First Bank Sec 7.XV “It shall be lawful to for the directors aforesaid, to establish offices wheresoever they shall think fit, within the United States…” First Bank Sec. 7.XI “No loan shall be made by the said corporation, for the use or on account of …any foreign prince or state.” This says that the corporate central bank is only allowed to operate within the boarders of the United States and no further. The direct order that the corporation shall not provide money to any foreign prince or state emphasizes that point. Another limit set by President Washington for the First Bank is below. First Bank Sec. 7.X “The said corporation… shall not be at liberty to purchase any public debt whatsoever.” The First Central Bank of the United States SHALL NOT BE AT LIBERTY TO PURCHASE ANY PUBLIC DEBT WHATSOEVER. That is very clear. It was against the law for the stockholders to direct the First Central Bank to purchase Treasury notes and bonds. The opposite situation occurs today; the five certificates hold the monopoly to exchange for Treasury notes and bonds and the entire nine trillion National Debt is owed to them in exchange for deposits to a Reserve Bank account. I don’t think this situation would have made the fathers of our country proud. Here are two additional limits established to control stockholders. First Bank Sec. 7IX. The total amount of the debts, which the said corporation shall at any time owe, whether by bond, bill, note, or other contract, shall not exceed the sum of ten millions of dollars, over and above the monies then actually deposited in the bank for safekeeping, In case of excess, the directors, under whose administration it shall happen, shall be liable for the same, in their natural and private capacities; and an action of debt may, in such case, be brought against them, or any of them, their or any of their heirs, executors or administrators, in any court of record of the United States, or of either of them, by any creditor or creditors of the said corporation, and may be prosecuted to judgment and execution. First Bank Sec.7 XI. No loan shall be made by the said corporation, for the use or on account of the government of the United States, to an amount exceeding one hundred thousand dollars There are two types of loans to the government mentioned. The first is public debt based on Treasury Bonds and Notes. The First Bank corporate stockholders were not allowed to own public debt. The second type would be a regular loan. The loan would be an “advance at discount” for income expected in the future such as special taxes, duties, fees or tolls. The First Bank was allowed to make this type of loan. Over all, the maximum amount the corporation could loan was ten million dollar ($10,000,000). Of that amount no more than one hundred thousand dollar ($100,000) could be loaned to the U.S. government. In addition, this act did not authorize any loan to a foreign government. The follow penalties were established to demonstrate the serious nature of these limits. First Bank Sec. 9: “And be it further enacted, That if the said corporation shall advance or lend any sum, for the use or on account of the government of the United States, to an amount exceeding one hundred thousand dollars; or of any particular state to an amount exceeding fifty thousand dollars; or of any foreign prince or state, all and every person and persons, by and with whose order, agreement, consent, approbation, or connivance, such unlawful advance or loan shall have been made, upon conviction thereof, shall forfeit and pay, for every such offence, treble the value or amount of the sum or sums which shall have been so unlawfully advanced or lent; one fifth thereof to the use of the informer, and the residue thereof to the use of the United States; to be disposed of by law and not otherwise.” President Washington didn’t put up with limited liability from corporations. The fact that those who unlawfully advance or loan to a foreign government may have to pay three times the loan amount demonstrates how important it is to control the corporate banker’s power. There is an added emphasis because of the financial consideration given an informer. The message is pretty clear that a corporate bank and the government need to be separate. No bank branches were allowed outside the county and no loans or advances to foreign countries. Hey Congress take note, the precedent is set, you don’t have to put up with that limited liability crap either. The Act to Incorporate the Subscribers to the First Bank of the United States established the sentiment of our founding fathers that corporate bankers should not do business in foreign countries. Now take a look at the freedom and powers granted to Reserve Bank stockholders in the Federal Reserve Act. Federal Reserve Act: FOREIGN BRANCHES Sec. 25. Any national banking association … may file application with the Federal Reserve Board, upon such conditions and under such regulations as may be prescribed by the said board, for the purpose of securing authority to establish branches in foreign countries… and to act as fiscal agents of the United States. The Federal Reserve Board shall have power to approve or to reject such application… if for other reasons the granting of such application is deemed inexpedient. Every time I read the last line the same question comes to mind, “Inexpedient for who?” There is no real benefit for the poor elected government. The assumption the 1913 Congress had was the Reserve Banks would collect gold from foreign countries in exchange for Treasury Bonds and Notes. But the Secretary of Treasury accepted a check deposited in a Reserve Bank account so the gold from foreign countries never made it into the Treasury. No conditions or restrictions are stated in section 25 Foreign Branches. The Federal Reserve Board of Governor has absolute power to authorize stockholders to go into any country they want and to act as fiscal agents of the United States. The term fiscal is defined as “pertaining to the treasury or finances of a nation or branch of the government”. That term relates to hypothecation of United States bonds, which means the privilege to pledge U.S. bonds to secure a loan. There is no better security in the financial world. The combination of fiscal agent and hypothecation gives the Federal Reserve stockholders the financial power of the United States in their back pocket, if that’s where they keep their wallet. This is why there has been an unconditional push into the global economy. If you have ever wondered why there are so many Federal Reserve notes all over the world and why so many foreign countries peg their currency against the U.S. dollar then here are the sections of the Federal Reserve Act that grant the privilege to do so. Open Market Operations Sec. 14 Any Federal reserve bank may, under rules and regulations prescribed by the Federal Reserve Board, purchase and sell in the open market, at home or abroad, either from or to domestic or foreign banks, firms, corporations, or individuals, cable transfers and bankers' acceptances and bills of exchange of the kinds and maturities by this Act made eligible for rediscount, with or without the indorsement of a member bank.” Open Market Operations Sec 14(a) To deal in gold coin and bullion at home or abroad, to make loans thereon, exchange Federal reserve notes for gold, gold coin, or gold certificates, and to contract for loans of gold coin or bullion, giving therefor, when necessary, acceptable security, including the hypothecation of United States bonds or other securities which Federal reserve banks are authorized to hold; Open Market Operations Sec 14(b) To buy and sell, at home or abroad, bonds and notes of the United States, and bills, notes, revenue bonds, and warrants with a maturity date of purchase of not exceeding six months, issued in anticipation of the collection of taxes or in anticipation of the receipt of assured revenues by any State, county, district, political subdivision, or municipality in the continental United States, including irrigation, drainage, and reclamation districts, such purchases to be made in accordance with rules and regulations prescribed by the Federal Reserve Board; Open Market Operations Sec 14(e) To establish accounts with other Federal reserve banks for exchange purposes and, with the consent of the Federal Reserve Board, to open and maintain banking accounts in foreign countries, appoint correspondents, and establish agencies in such countries wheresoever it may deem best for the purpose of purchasing, selling, and collecting bills of exchange, and to buy and sell with or without its indorsement, through such correspondents or agencies, bills of exchange arising out of actual commercial transactions which have not more than ninety days to run and which bear the signature of two or more responsible parties. Powers of the Federal Reserve Bank Sec. 13 Any Federal reserve bank may discount acceptances which are based on the importation or exportation of goods and which have a maturity at time of discount of not more than three months, and indorsed by at least one member bank. Powers of the Federal Reserve Bank Sec 13.2 Any member bank may accept drafts or bills of exchange drawn upon it and growing out of transactions involving the importation or exportation of goods having not more than six months sight to run; Powers of the Federal Reserve Bank Sec 13.7 The rediscount by any Federal reserve bank of any bills receivable and of domestic and foreign bills of exchange, and of acceptances authorized by this Act, shall be subject to such restrictions, limitations, and regulations as may be imposed by the Federal Reserve Board. U.S. Constitution The 1913 Federal Reserve Act granted the privilege of stockholders to deal with foreign countries. Those powers conflict with the U.S. Constitution. Here are the powers Congress shall have. To regulate commerce with foreign nations To coin money, regulate the value thereof, and of foreign coin No person holding office of profit or trust under them shall accept of any present, emolument, office or title of any kind whatever, from any king, prince, or foreign state. No state shall enter into any treaty, alliance, or confederations with a foreign power. Foreign Central Banks With Fed notes all over the world it sounds to me like someone other than Congress is coining and regulating new American money and entering into treaties, alliances and confederations. That would be unconstitutional. It doesn’t look like the poor elected government is getting any benefit from the world using the dollar. Actually the U.S. is feeling the down side and that is price inflation. The stockholders of the Reserve Banks exchange a deposit in their bank for Treasury Bonds so stockholders actually get the Treasury securities for free. Then they sell them to foreign governments. Here is a statement from the Dr. Econ web site. “The Office of Management and Budget states that, at the end of 2005, “foreign central banks owned 63 percent of the Federal debt held by foreign residents; private investors owned nearly all the rest”. The official foreign holdings of specific countries is a “well-guarded secret,” but overall foreign holdings (that is, official foreign holdings plus holdings from private foreign investors) are tracked by the Treasury.” The elected government doesn’t know how many U.S. Treasury securities a foreign country owns because that is a “well-guarded secret”. Another detail that is not known is how much profit the stockholders of the foreign bank branches make. Do you think profits from foreign operations should be tax free in the U.S.? As Chairman Governor I would like to see some franchise tax income from foreign Reserve Bank operations. It would help balance the budget each year so another Treasury Bond won’t have to be issued. It would also help balance trade. Although the National Debt is a flakey situation the balance of trade between countries is handled differently. Think a balancing trade in term of goods and services and not money. If the U.S. imported too many goods from one country then all we need to do to balance trade is to sell them things. Sell then a few Boeing 747’s, Caterpillar dump trucks, Winnebagos, Sikorsky H-53 helicopters, John Deer Harvesters and Harley Davison Electra Glides in blue. The way to balance trade is with things and Americans builds great things the rest of the world wants.76 Foreign Conclusion As Chairman Governor my position would be that we are already in the global economy and I’m not going to pull us out nor am I going to push the U.S. further in. This means no big push for additional Free Trade Agreements or using tourism legislation to get around the U.S. Constitution on foreign affairs. Those are matters for Congress and Supreme Court judges. Hopefully, foreign policy issues will be discussed after Reserve Bank stockholder power is dissolved and their profit money stops buying political influence. My first foreign policy recommendation to Congress is to dissolve the privilege to own capital stock, in excess of minimum membership fee stock, in the World Bank, International Monetary fund, foreign Reserve Bank Branches and Member banks operating in foreign countries with permission from the Board of Governors. All capital stock in excess of minimum membership fee stock should become the property of the U.S. Government. I also recommend that the Board of Directors of all Federal Banking institutions become civil servants and receive payment allocations from the Congressional budget. The income from these financial institutions should more than make up the difference. As Chairman Government I’m going to take full control of the International Monetary Fund and World Bank. Both are based in Washington D.C. and gained their power acting as fiscal agents of the U.S. In reality, our ignorance of the power granted to the Federal Reserve corporate stockholders has screwed up a lot of countries. According to TV News there are demonstrations that grow into riots when the World Bankers come to a country to meet. Rioting is a human defense mechanism. In the psychology of fight, flight and freeze, to riot is to fight. Experiencing the change in their country after the World Bank arrived to help them puts people on the defensive. It appears people from many countries came to the same conclusion that they have to fight the World Bankers. Are the people crazy or are the World Bankers taking something that doesn’t belong to them. We are a great nation and I believe you would want the Chairman Governor to stabilize the Fed note for the world and not use it to take over a country. It’s time to actually be the strong, humane, giving people we always wanted the world to see. I believe the world is not mad at the elected government of the United States of America. I think the rest of the world is really mad at the independent corporate government who never runs out of Fed notes to loan. From the Reserve Bank stockholder’s point of view, it’s not their fault that people don’t understand the system. As Chairman Governor I will help foreign governments stabilize themselves with a steady discount rate and avoid sucking their money supply dry with “advance at discount” and Open Market Operations. As Chairman Governor, I can fix many world problems that were originally caused by the Federal Reserve stockholders. And those stockholders have caused a lot of problems. End of Chapter 7 www.frbsf.org/education/activities/drecon/answerxml.cfm?selectedurl=/2005/0507.html Ask Dr. Econ, Monetary Policy, Who are the largest holders of U.S. public debt? The First Central Bank of the United States, Section 7.9, February 25, 1771. http://landru.i-link-2.net/monques/firstbank.html The American Heritage Dictionary, Second College Edition, Houghton Mifflin Company, Boston 1982 page 507. Federal Reserve Act of 1913, Section 14. http://www.newyorkfed.org/markets/statistics/dlyrates/fedrate.html Historic Changes of the Target Federal Funds and Discount Rates, Federal Reserve Bank of New York, Markets March 2008. ftp://ftp.bls.gov/pub/special.resuest/cpu/cpial.txt, U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index, All Urban Consumers – (CPI-U) U.S. city average, all items, 1982-84=100, 4-16-2008,