All language subtitles for The Money Masters CD2.ENG

Now it was time for the Money Changers
to get back to the business

of a new private
central bank for America.

During the early 1900s, men
like J.P. Morgan led the charge.

One final panic would be necessary
to focus the nation's attention

on the supposed need for a central bank.

The rationale was that only a
central bank could prevent bank failures.

Morgan was clearly the
most powerful banker in America

and a suspected agent for the Rothschilds.

Morgan had helped finance
John D. Rockefeller's Standard Oil empire

he had also helped finance the
monopolies of Edward Harriman in railroads,

of Andrew Carnegie in steel and
of others in numerous industries.

But, on top of that, J.P. Morgan's
father, Junius Morgan,

had been America's
financial agent to the British.

After his father's death, J.P. Morgan
took on a British partner,

Edward Grenfell, a long-time
director of the Bank of England.

In fact, upon Morgan's death, his estate
contained only a few million dollars.

The bulk of the securities
most people thought he owned,

were in fact owned by others.

In 1902, President Theodore Roosevelt
allegedly went after Morgan and his friends

by using the Sherman Anti-Trust Act to
try to break up their industrial monopolies.

Actually, Roosevelt did very little
to interfere in the growing monopolization

of American industry by
the bankers and their surrogates.

For example, Roosevelt supposedly
broke up the Standard Oil monopoly.

But it wasn't really broken at all.

It was merely divided into seven corporations,

all still controlled by the Rockefellers.

The public was aware of this
thanks to political cartoonists

like Thomas Nast who referred to
the bankers as the "Money Trust."

By 1907, the year after
Teddy Roosevelt's re-election,

Morgan decided it was time to
try for a central bank again.

Using their combined financial muscle,

Morgan and his friends were secretly
able to crash the stock market.

Thousands of small banks
were vastly overextended.

Some had reserves of
less than one percent (1%),

thanks to the fractional reserve principle.

Within days, banks runs
were commonplace across the nation.

Now Morgan stepped into the public arena

and offered to prop up
the faltering American economy

by supporting failing banks with
money he manufactured out of nothing.

It was an outrageous proposal,

far worse than even fractional reserve banking,

but Congress let him do it.

Morgan manufactured $200 million worth

of this completely reserveless, private money

and bought things with it,
paid for services with it,

and sent some of it to his
branch banks to lend out at interest.

His plan worked.

Soon, the public regained confidence
in money in general

and quit hoarding their currency.

But as a result, banking
power was further consolidated

into the hands of a few large banks.

By 1908 the panic was over and
Morgan was hailed as a hero

by the president of Princeton University,

a man by the name of Woodrow Wilson:

Economics textbooks would later explain

that the creation of
the Federal Reserve System

was the direct result
of the panic of 1907:

"with its alarming
epidemic of bank failures,

the country was fed up once and for all

with the anarchy of unstable private banking."

But Minnesota Congressman
Charles A. Lindbergh, Sr.,

the father of the
famous aviator, "Lucky Lindy,"

later explained that the
Panic of 1907 was really just a scam:

So, since the passage of the
National Banking Act of 1863,

the Money Changers had been able to
create a series of booms and busts.

The purpose was not only to
fleece the American public of their property,

but to later to claim that the banking
system was basically so unstable

that it had to be consolidated
into a central bank once again.

After the crash, Teddy Roosevelt,
in response to the Panic of 1907,

signed into law a bill
creating something called

the National Monetary Commission.

The Commission was to
study the banking problem

and make recommendations to Congress.

Of course, the Commission was packed
with Morgan's friends and cronies.

The Chairman was a man named Senator
Nelson Aldrich from Rhode Island.

Aldrich represented the
Newport, Rhode Island homes

of America's richest banking families.

His daughter married John D. Rockefeller, Jr.,
and together they had five sons:

John, Nelson (who would become
the Vice-President in 1974),

Laurence, Winthrop, and David

(the head of the Council on Foreign Relations

and former Chairman of Chase Manhattan bank).

As soon as the National
Monetary Commission was set up,

Senator Aldrich immediately embarked
on a two-year tour of Europe,

where he consulted at length
with the private central bankers

in England, France and Germany.

The total cost of his trip alone
to the taxpayers was $300,000

an astronomical sum in those days.

Shortly after his return,
on the evening of November 22, 1910,

some of the wealthiest and
most powerful men in America

boarded Senator Aldrich's private rail car

and in the strictest secrecy
journeyed to this place,

Jekyll Island, off the coast of Georgia.

With the group came Paul Warburg.

Warburg had been given a
$500,000 per year salary

to lobby for the passage of a
privately-owned central bank in America

by the investment firm,
Kuhn, Loeb & Company.

Warburg's partner in this firm
was a man named Jacob Schiff,

the grandson of the man who
shared the Green Shield house

with the Rothschild family in Frankfurt.

Schiff, as we'll later find out,
was in the process of spending $20 million

to finance the overthrow of the Tsar of Russia.

These three European banking families,
the Rothschilds, the Warburgs, and the Schiffs

were interconnected by marriage
down through the years,

just as were their
American banking counterparts,

the Morgans, Rockefellers and Aldrichs.

Secrecy was so tight that all seven
primary participants were cautioned

to use only first names to prevent
servants from learning their identities.

Years later one participant, Frank Vanderlip,

president of National City Bank of New York

and a representative of the Rockefeller family,
confirmed the Jekyll Island trip

in the February 9, 1935 edition
of the Saturday Evening Post:

The participants came here to figure out
how to solve their major problem

how to bring back a
privately-owned central bank

but there were other problems that
needed to be addressed as well.

First of all, the market share of the
big national banks was shrinking fast.

In the first ten years of the century,

the number of U.S. banks had
more than doubled to over 20,000.

By 1913, only 29% of all banks
were National Banks

and they held only 57% of all deposits.

As Senator Aldrich later
admitted in a magazine article:

Therefore, something had to be done to
bring these new banks under their control.

As John D. Rockefeller put it:
"Competition is sin"

Secondly, the nation's economy was so strong

that corporations were starting to
finance their expansions out of profits

instead of taking out
huge loans from large banks.

In the first 10 years of the new century,

70% of corporate funding came from profits.

In other words, American industry was
becoming independent of the Money Changers,

and that trend had to be stopped.

All the participants knew

that these problems could be
hammered out into a workable solution,

but perhaps their biggest problem
was a public relations problem,

the name of the new central bank.

That discussion took place
right here in this room,

one of the many conference rooms
in this sprawling hotel

today known as the Jekyll Island Club Hotel.

Aldrich believed that the word "bank"
should not even appear in the name.

Warburg wanted to call the legislation

the National Reserve Bill
or the Federal Reserve Bill.

The idea here was to give the impression
that the purpose of the new central bank

was to stop bank runs, but also
to conceal its monopoly character.

However, it was Aldrich,
the egotistical politician,

who insisted it be called the Aldrich Bill.

After nine days at Jekyll Island,
the group dispersed.

The new central bank would be very
similar to the old Bank of the United States.

It would be given a
monopoly over U.S. currency

and create that money out of nothing.

How does the Fed "create"
money out of nothing?

It is a four-step process.
But first a word on bonds.

Bonds are simply promises to pay
- or government IOUs.

People buy bonds to get
a secure rate of interest.

At the end of the term of the bond,
the government repays the bond, plus interest,

and the bond is destroyed.

There are about 3.6 trillion dollars worth
of these bonds at present.

Now here is the Fed moneymaking process:

Step 1. The Fed Open Market Committee approves

the purchase of U.S. Bonds on the open market.

Step 2. The bonds are purchased by the Fed Bank

from whoever is offering them
for sale on the open market.

Step 3. The Fed pays for the bonds with
electronic credits to the seller's bank,

which in turn credits the seller's bank account.

The trick is that these credits are based
on nothing. The Fed just creates them.

Step 4. The banks use these
deposits as reserves.

They can loan out over ten times
the amount of their reserves

to new borrowers, all at interest.

In this way, a Fed purchase of,
say a million dollars worth of bonds,

gets turned into over 10 million
dollars in bank accounts.

The Fed, in effect, creates
10% of this totally new money

and the banks create the other 90%.

To reduce the amount of money in the economy,
the process is just reversed:

the Fed sells bonds to the public, and money
flows out of the purchaser's local bank.

Loans must be reduced by ten times
the amount of the sale.

So, a Fed sale of a million dollars in bonds,

results in 10 million dollars
less money in the economy.

So how does this benefit the bankers whose
representatives huddled at Jekyll Island?

1st - It totally misdirected banking
reform efforts from proper solutions.

2nd - It prevented a proper,
debt-free system of government finance

like Lincoln's Greenbacks
- from making a comeback.

The bond-based system of government finance,

forced on Lincoln
after he created Greenbacks,

was now cast in stone.

3rd - It delegated to the bankers the
right to create 90% of our money supply

based on only fractional reserves

which they could then loan out at interest.

4th - It centralized overall
control of our nation's money supply

in the hands of a few men.

5th - It established a central bank
with a high degree of independence

from effective political control.

Soon after its creation, the Fed's
Great Contraction in the early 1930s

would cause the Great Depression.

This independence has been enhanced
since then, through additional laws.

In order to fool the public into
thinking the government retained control,

the plan called for the Fed to
be run by a Board of Governors

appointed by the President
and approved by the Senate.

But all the bankers had to do
was to be sure that their men

got appointed to the Board of Governors.

That wasn't hard. Bankers have money, and
money buys influence over politicians.

Once the participants left Jekyll Island,
the public relations blitz was on.

The big New York banks put together
an "educational" fund

of five million dollars
to finance professors

at respected universities
to endorse the new bank.

Woodrow Wilson at Princeton was one of
the first to jump on the bandwagon.

But the bankers' subterfuge didn't work.

The Aldrich Bill was quickly
identified as the "banker's bill"

a bill to benefit only what
became known as the "Money Trust."

As Congressman Lindbergh put it
during the Congressional debate:

Seeing they didn't have
the votes to win in Congress,

the Republican leadership
never brought the Aldrich Bill to a vote.

The bankers quietly decided to move to
track two, the Democratic alternative.

They began financing Woodrow Wilson
as the Democratic nominee.

As respected historian James Perloff put it,

Wall Street financier Bernard Baruch was
put in charge of Wilson's education:

So now, the stage was set.
The Money Changers were poised to install

their privately-owned central bank once again.

The damage president Andrew Jackson
had done 76 years earlier

had been only partly repaired

with the passage of the
national bank act during the civil war.

Since then, the battle had
raged on across the decades.

The "Jacksonians" became the "Greenbackers"

who became the hard-core
supporters of William Jennings Bryan.

With Bryan leading the charge,
these opponents of the Money Changers,

ignorant of Baruch's tutelage, now threw
themselves behind Democrat Woodrow Wilson.

They and Bryan would soon be betrayed.

During the Presidential campaign,

the Democrats were careful to
pretend to oppose the Aldrich Bill.

As Rep. Louis McFadden, himself
a Democrat as well as chairman

of the House Banking and Currency Committee,
explained it 20 years after the fact:

Once Wilson was elected, Morgan, Warburg,

Baruch and company advanced a "new" plan,

which Warburg named
the Federal Reserve System.

The Democratic leadership hailed the new bill,
called the Glass-Owen Bill,

as something radically
different from the Aldrich Bill.

But in fact, the bill was virtually
identical in every important detail.

In fact, so vehement were the
Democratic denials of similarity

that Paul Warburg - the father of both bills �

had to step in to reassure
his paid friends in Congress

that the two bills
were virtually identical:

But that admission was
for private consumption only.

Publicly, the Money Trust trotted out
Senator Aldrich and Frank Vanderlip,

the president of Rockefeller's
National City Bank of New York

and one of the Jekyll Island seven,

to oppose the new Federal Reserve System.

Years later, however, Vanderlip
admitted in the Saturday Evening Post

that the two measures
were virtually identical:

As Congress neared a vote, they called
Ohio attorney Alfred Crozier to testify.

Crozier noted the similarities between
the Aldrich Bill and the Glass-Owen Bill:

During the debate on the measure,

Senators complained that the big banks
were using their financial muscle

to influence the outcome.

"There are bankers in this country who
are enemies of the public welfare,"

said one Senator. What an understatement!

Despite the charges
of deceit and corruption,

the bill was finally snuck through
the Senate on December 22, 1913,

after most Senators had
left town for the Holidays,

after having been assured by
the leadership that nothing would be done

until long after the Christmas recess.

On the day the bill was passed,
Congressman Lindbergh

prophetically warned his countrymen that:

On top of all this, only weeks earlier,

Congress had finally passed
a bill legalizing income tax.

Why was the income tax law important?

Because bankers finally
had in place a system

which would run up a virtually
unlimited federal debt.

How would the interest on this debt
be repaid, never mind the principal?

Remember, a privately-owned central bank
creates the principal out of nothing.

The federal government was small then.

Up to then, it had subsisted merely
on tariffs and excise taxes.

Just as with the Bank of England,

the interest payments had to be
guaranteed by direct taxation of the people.

The Money Changers knew
that if they had to rely

on contributions from the states,

eventually the individual
state legislatures would revolt

and either refuse to pay
the interest on their own money,

or at least bring political pressure
to bear to keep the debt small.

It is interesting to note that
in 1895 the Supreme Court

had found a similar income
tax law to be unconstitutional.

The Supreme Court even found a corporate
income tax law unconstitutional in 1909.

As a result, Senator Aldrich hustled a bill

for a constitutional amendment
allowing income tax through the Congress.

The proposed 16th Amendment to the Constitution

was then sent to the
state legislatures for approval,

but some critics claim that
the 16th Amendment was never ratified

by the necessary 3/4s of the states.

In other words, the 16th Amendment
may not be legal.

But the Money Changers were in
no mood to debate the fine points.

By October of 1913, senator Aldrich had
hustled the income tax bill through Congress.

Without the power to tax the people directly
and bypass the states,

the Federal Reserve Bill
would be far less useful to those

who wanted to drive America
deeply into their debt.

A year after the passage of
the Federal Reserve Bill,

Congressman Lindbergh explained
how the Fed created

what we have come to
call the "Business Cycle"

and how they use it to their advantage:

Congressman Lindbergh was
correct on all points.

What he didn't realize was
that most European nations

had already fallen prey to the central bankers
decades or centuries earlier.

But he also mentions the interesting
fact that only one year later,

the Fed had cornered the market in gold;
this is how he put it:

"Already the Federal Reserve banks have
cornered the gold and gold certificates..."

But Congressman Lindbergh was
not the only critic of the Fed.

Congressman Louis McFadden, the Chairman

of the House Banking and Currency
committee from 1920 to 1931

remarked that the Federal
Reserve Act brought about:

Notice how McFadden saw
the international character

of the stockholders of the Federal Reserve.

Another chairman of the House Banking
and Currency Committee in the 1960s,

Wright Patman from Texas, put it this way:

Even the inventor of the
electric light, Thomas Edison,

joined the fray in criticizing
the system of the Federal Reserve:

Three years after the passage
of the Federal Reserve Act,

even President Wilson
began to have second thoughts

about what had been unleashed
during his first term in office.

Before his death in 1924,
President Wilson realized

the full extent of the damage he had
done to America, when he confessed:

"I have unwittingly ruined my government."

So finally, the Money Changers,

those who profit by manipulating
the amount of money in circulation,

had their privately owned central bank
installed again in America.

The major newspapers
(which they also owned)

hailed passage of the Federal Reserve Act
of 1913, telling the public that

"now depressions could be
scientifically prevented."

The fact of the matter was that now
depressions could be scientifically created.

Power was now centralized
to a tremendous extent.

Now it was time for a war - a really big war
- in fact, the first World War.

Of course, to the central banker,

the political issues of war don't matter
nearly as much as the profit potential,

and nothing creates debts like warfare.

England was the best example up to that time.

During the 119-year period between
the founding of the Bank of England

and Napoleon's defeat at Waterloo,

England had been at war for 56 years.

And much of the remaining time,
she'd been preparing for war.

In World War I, the German Rothschilds
loaned money to the Germans,

the British Rothschilds
loaned money to the British,

and the French Rothschilds
loaned money to the French.

In America, J.P. Morgan was
the sales agent for war materials

to both the British and the French.

In fact, six months into the war, Morgan
became the largest consumer on earth,

spending $10 million a day.

His offices at 23 Wall Street

were mobbed by brokers and
salesmen trying to cut a deal.

In fact, it got so bad that the
bank had to post guards at every door

and at the partners' homes as well.

Many other New York bankers
made out as well from the war.

President Wilson appointed Bernard Baruch
to head the War Industries Board.

According to historian James Perloff,
both Baruch and the Rockefellers

profited by some $200 million
during the war.

But profits were not the only motive.
There was also revenge.

The Money Changers
never forgave the Tsars

for their support of
Lincoln during the Civil War.

Also, Russia was the
last major European nation

to refuse to give in to the
privately-owned central bank scheme.

Three years after World War I broke out,

the Russian Revolution toppled the Tsar
and installed the scourge of communism.

Jacob Schiff of Kuhn, Loeb & Co.
bragged from his deathbed

that he had spent $20 million
towards the defeat of the Tsar.

Money was funnelled from England
to support the revolution as well.

Why would some of the richest men in the world
financially back communism,

the system that was openly vowing
to destroy the so-called capitalism

that made them wealthy?

Researcher Gary Allen explained it this way:

As W. Cleon Skousen put it in his
1970 book "The Naked Capitalist":

But what if these revolutionaries
get out of control

and try to seize power
from the super rich?

After all, it was Mao Tse Tung who
in 1938 stated his position concerning power:

"Political power grows
out of the barrel of a gun."

The Wall Street/London axis
elected to take the risk.

The master-planners attempted to
control revolutionary communist groups

by feeding them vast quantities
of money when they obeyed,

and contracting their money supply,
or even financing their opposition,

if they got out of control.

Lenin began to understand that

although he was the absolute
dictator of the new Soviet Union,

he was not pulling the financial strings;

someone else was silently in control:

Who was behind it?

Rep. Louis T. McFadden,
the Chairman of the House Banking

and Currency Committee throughout the 1920s

and into the Great Depression years
of the 1930s, explained it this way:

In other words, the Fed
and the Bank of England,

at the behest of the international
bankers who controlled them,

were creating a monster,
one which would fuel seven decades

of unprecedented Communist revolution,
warfare, and most importantly - debt.

In case you think there is some
chance that the Money Changers

got communism going
and then lost control,

in 1992, The Washington Times reported
that Russian President Boris Jeltsin

was upset that most of the incoming
foreign aid was being siphoned off

"straight back into the coffers
of Western banks in debt service."

No one in his right mind, would
claim that a war as large as World War I

had a single cause. Wars are
complex things with many causative factors.

But on the other hand it
would also be equally foolish

to ignore as a prime cause of WW I those
who would profit the most from the war.

The role of the Money Changers
is no wild conspiracy theory.

They had a motive - a short-range,
self-serving motive

as well as a long-range, political motive
of advancing totalitarian government,

with the Money Changers
maintaining the financial clout

to control whatever politician
might emerge as the leader.

Next, we'll see what the Money Changers'
ultimate political goal is for the world.

Shortly after WW I,
the overall political agenda

of the Money Changers
began to be clear.

Now that they controlled
national economies individually,

the next step was the ultimate
form of consolidation:

world government.

The new world government proposal
was given top priority

at the Paris peace conference after WW I.

It was called the League of Nations.

But much to the surprise of
Paul Warburg and Bernard Baruch,

who attended the peace conference
with president Wilson,

the world was not yet ready
to dissolve national boundaries.

Nationalism still beats strong
in the human breast.

For example, Lord Curzon,
the British foreign secretary

called the League of Nations a good joke.

Even though it was the stated policy
of the British government to support it.

To the humiliation of president Wilson,

the U.S. Congress
wouldn't ratify the League either.

Despite the fact that it had
been ratified by many other nations,

without money flowing from
the U.S. treasury, the League died.

After WW I, the American
public had grown tired

of the internationalist policies
of democrat Woodrow Wilson.

In the presidential election of 1920,

Republican Warren Harding won a landslide
victory with over 60% of the votes.

Harding was an ardent foe of
both bolshevism and the League of Nations.

His election, which opened a 12 year run

of republican presidents in the White House,

lead to an unprecedented era of prosperity
known as the "roaring twenties".

Despite the fact that the war
had brought America a debt

ten times larger than its civil war debt,

still the American economy surged.

Gold had poured into the country during the war

and it continued to do so afterwards.

In the early 1920's, the governor of this bank,

the Federal Reserve Bank of New York,

a man named Benjamin Strong,

met frequently with the secretive and
eccentric governor of the Bank of England,

Montague Norman.

Norman was determined to replace the gold

England had lost to the U.S. during WW I

and return the Bank of England to its former
position of dominance in world finance.

On top of that, rich with gold,

the American economy might
get out of control again,

just like it had done after the civil war.

During the next 8 years, under the
presidencies of Harding and Coolidge,

the huge federal debt
built up during WW I

was cut by 38%, down to $16 billion.

The greatest percentage drop in U.S. history.

During the election of 1920,
Warren Harding and Calvin Coolidge

ran against James Cox,
the governor of Ohio,

and the little known Franklin D. Roosevelt,

who had previously risen to no higher post

than president Wilson's
assistant secretary of the navy.

After his inauguration, Harding moved quickly
to formally kill the League of Nations.

Then he quickly moved to
reduce domestic taxes

while raising tariffs to record heights.

Now, this was a revenue policy
of which most of the founding fathers

would certainly have approved.

His second year in office, Harding
took ill on a train trip in the West

and suddenly died.

Although no autopsy was performed

the cause was said to be either
pneumonia or food poisoning.

When Coolidge took over, he continued
Harding's domestic economic policy

of high tariffs on imports
while cutting income taxes.

As a result, the economy grew at such
a rate that net revenue still increased.

Now, that had to be stopped.

So, just as they had done
so frequently before,

the Money Changers decided it was
time to crash the American economy.

The Fed began
flooding the country with money.

They increased the money supply
by 62% during these years.

Money was plentiful.

This is why it was known as
the "roaring twenties".

Before his death in 1919,
former president Teddy Roosevelt

warned the American people what was going on.

As reported in the March 27th, 1922 edition
of the NY Times, Roosevelt said:

Just one day before, in the NY Times,
the mayor of NY, John Highland

quoted Roosevelt and blasted those
he saw as taking control of America,

its political machinery and its press:

Why didn't people listen to
such strong warnings and demand

that Congress reverse its 1913
passage of the Federal Reserve Act?

Because remember: it was the 1920s:

a steady increase in bank loans
contributed to a rising market.

In other words, just as it is today,
in times of prosperity,

no one wants to
worry about economic issues.

But there was a dark side
to all this prosperity.

Businesses expanded and
became strung out on credit.

Speculation in the booming
stock market became rampant.

Although everything looked rosy,
it was a castle made of sand.

When all was in readiness,
in April of 1929, Paul Warburg,

the father of the Fed,
sent out a secret advisory

warning his friends that a collapse
and nationwide depression was certain.

In August of 1929,
the Fed began to tighten money.

It is not a coincidence
that the biographies

of all the Wall Street giants of that era,

John D. Rockefeller,
J.P. Morgan, Bernard Beruch etc.

all marvelled that they got out of
the stock market just before the crash

and put all their assets
in cash or gold.

On October 24th, 1929, the big NY bankers

called in their 24-hour broker call loans.

This meant that both
stockbrokers and customers

had to dump their stocks on the market
to cover their loans,

no matter what price
they had to sell them for.

As a result, the market tumbled and
that day was known as "black Thursday".

According to John Kenneth Galbraith,
writing in "The Great Crash, 1929",

at the height of the selling frenzy,
Bernard Beruch brought Winston Churchill

into the visitors gallery of
the NY stock exchange here,

to witness the panic and
impress him with his power

over the wild events down on the floor.

Congressman Louis McFadden,

chairman of the House Committee on
banking and currency from 1920 to 1931,

knew whom to blame.

He accused the Fed and the international
bankers of orchestrating the crash.

But McFadden went even farther:

he openly accused them
of causing the crash

in order to steal America's gold.

In February 1931, in the midst
of the depression, he put it this way:

Curtis Dall, a broker for Lehman brothers,

was on the floor of the NY stock exchange
the day of the crash.

In his 1970 book,
"FDR: My Exploited Father-in-law",

he explained that the crash was triggered

by the planned sudden shortage of
call money in the NY money market.

Within a few weeks, $3 billion
of wealth simply seemed to vanish.

Within a year, $40 billion
had been lost.

But did it really disappear? Or was
it simply consolidated in fewer hands?

And what did the Fed do?

Instead of moving
to help the economy out,

by quickly lowering interest rates
to stimulate the economy,

the Fed continued to brutally
contract the money supply further,

deepening the depression.

Between 1929 and 1933,

the Fed reduced the money supply
by an additional 33%.

Although most Americans have never heard

that the Fed was
the cause of the depression,

this is well known among top economists.

Milton Friedman, the Nobel price-winning
economist, now at Stanford University,

said the same thing in a national public
radio interview in January of 1996:

But the money lost by most Americans
during the depression,

didn't just vanish.

It was just re-distributed
into the hands of those

who had gotten out just before the crash
and had purchased gold,

which is always a safe place to
put your money just before a depression.

But America's money also went overseas.

Incredibly, as president Hoover was
heroically trying to rescue banks

and prop up businesses,

with millions of Americans starving
as the great depression deepened,

millions of dollars were being
spent re-building Germany

from damage sustained during WW I.

Eight years before
Hitler would invade Poland,

representative Louis McFadden,

chairman of the House
Banking and Currency Committee,

warned Congress that Americans
were paying for Hitler's rise to power.

Franklin D. Roosevelt was swept into office
during the 1932 presidential election.

Once Roosevelt was in office, however,

sweeping emergency banking measures
were immediately announced,

which did nothing but increase the
Fed's power over the money supply.

Then, and only then,
did the Fed finally begin

to loosen the purse strings
and feed new money

out to the starving American people.

At first, Roosevelt railed
against the Money Changers

as being the cause of the depression.

Believe it or not, this is what he said
on March 4th, 1933 in his inaugural address:

But two days later, Roosevelt declared
a bank holiday and closed all banks.

Later that year, Roosevelt outlawed
private ownership of all gold bullion

and all gold coins
with the exception of rare coins.

Most of the gold in the
hands of the average American

was in the form of gold coins.

The new decree was,
in effect, a confiscation.

Those who didn't comply risked
as much as ten years in prison

and a $10,000 fine,
the equivalent of a $100,000 today.

Out in small town America,
some people didn't trust Roosevelt's order.

Many were torn between
keeping their hard earned wealth

or obeying the government.

Those who did turn in their gold,
were paid the official price for it:

$20.66 per ounce.

So unpopular was the confiscation order,

that no one anywhere in government
would take credit for authoring it.

No congressman claimed it.

At the signing ceremony, president
Roosevelt made it clear to all present

that he was not the author of it
and publicly stated

that he had not ever read it.

Even a secretary of the Treasury
said he had never read it either,

saying it was "what the experts wanted".

Roosevelt convinced the public
to give up their gold

by saying that pooling the
nation's resources was necessary

to get America out of the depression.

With great fanfare, he ordered
a new bullion depository,

built to hold the mountain of
gold the U.S. government

was illegally confiscating.

By 1936, the U.S. bullion depository
at Fort Knox was completed

and in January 1937 the gold
began to flow into it.

The rip-off of the ages
was about to proceed.

In 1935, once the gold
had all been turned in,

the official price of gold was
suddenly raised to $35 per ounce.

But the catch was, only foreigners could
sell their gold at the new higher price.

The Money Changers,
who had heeded Warburg's note

and gotten out of the stock market
just before the crash

and bought gold at $20.66 per ounce
and then shipped it to London,

could now bring it back and
sell it back to the government

nearly doubling their money

while the average American starved.

The Fort Knox bullion depository

sits here in the middle of the
Fort Knox military reservation,

30 miles southwest of Louisville, Kentucky.

This is as close as we were
permitted to get to the depository

despite years of letters from members of
Congress to allow our film crew inside.

The 4-acre grounds immediately
surrounding the building

are guarded by an electrified steel fence,

an open moat and four machine gun-armed
guard pillboxes at the structure's corners.

When the gold began arriving,
on January 13th 1937,

there was unprecedented security.

Thousands of official
guests watched the arrival

of a nine-car train from Philadelphia,

guarded by armed soldiers, postal
inspectors, secret servicemen

and guards from the U.S. mint.

It was all great theatre:

America's gold supply from
across the land had been pooled,

supposedly for the public benefit,

and then safely tucked into Fort Knox.

But all that security would soon be
breached by the government itself.

Now the stage was set
for a really big war,

one which would pile up debt
far beyond that of WW I.

For example, in 1944 alone, the U.S.
national income was only $183 billion,

yet $103 billion was spent on the war.

This was 30 times the
spending rate during WW I.

In fact, the American taxpayer picked up
55% of the total allied cost of the war.

But, equally important, virtually
every nation involved in WW-II

greatly multiplied their debt.

In the U.S. for example, federal debt
went from $43 billion in 1940

up to $257 billion in 1950,
an increase of 598%.

Between 1940 and 1950,
Japanese debt swelled 1348%.

French debt grew 583% and
Canadian debt soared 417%.

After the war, the world was now
divided into two economic camps.

Communist-command economies on one hand

vs monopoly capitalists on the other,

set to fight it out in one perpetual
and highly profitable arms race.

It was finally time for the central
bankers to embark in earnest

on their three-step plan
to centralize the economic systems

of the entire world

and finally bring about their
global government or New World Order.

The phases of this plan were:

Step 1: Central Bank domination
of national economies worldwide.

Step 2: Centralize regional
economies through organizations

such as the European Monetary Union
and regional trade unions such as NAFTA.

Step 3: Centralize the world economy
through a World Central Bank,

a world money and ending national
independence through abolition

of all tariffs by treaties like GATT.

Step 1 was completed long ago.

Steps 2 and 3 are far advanced,
nearing completion.

What about gold?

Amongst central banks, the
largest holder of gold is now the IMF.

It and central banks now
control 2/3 of the world gold supply,

giving them the ability
to manipulate the gold market.

Remember the Money Changers' golden rule:

"He who has the gold makes the rules".

But before we get into
solutions to our problem,

let's take a look to what happened
to all that gold in Fort Knox.

Because if we don't understand
that the gold has been stolen,

we will allow ourselves to be
stampeded into the wrong solution:

a gold-backed currency.

Most Americans still believe that
the gold is still here, at Fort Knox.

At the end of WW-II, Fort Knox contained
over 700 million ounces of gold,

an incredible 70% of
all the gold in the world.

How much remains? No one knows.

Despite the fact that federal law requires

an annual physical audit of Fort Knox gold,

the treasury has consistently
refused to conduct one.

The truth is that a reliable audit
of whatever remains here,

has not been conducted since
president Eisenhower ordered one in 1953.

Where did America's gold in Fort Knox go?

Over the years, it was sold off
to European Money Changers

at the $35 per ounce price.

Remember: this was during the time
when it was illegal for Americans

to buy any of their
own gold from Fort Knox.

In fact, there was a very infamous case

where the Firestone family set up
a string of dummy corporations

to purchase Fort Knox's gold
and keep it in Switzerland,

never hitting U.S. shores.

They were eventually caught, however,
and successfully prosecuted.

Finally, by 1971, all the pure gold
had been secretly removed from Fort Knox,

drained back to London.

Once the gold was gone from Fort Knox,

president Nixon closed the gold window

by repealing Roosevelt's
gold reserve act of 1934,

finally making it legal once again
for Americans to buy gold.

Naturally, gold prices
immediately began to soar:

nine years later, gold
sold for $880 per ounce,

25 times what the gold
in Fort Knox was sold for.

One would think that eventually,
someone in the government

would get wind of what was happening
and blow the whistle.

The largest fortune
in the history of the world, stolen.

Shades of the old
James Bond film "Goldfinger".

Well, as a matter of fact, Ian Flaming,
the author of the James Bond series,

was head of the British
counter-intelligence service MI5.

Some believed, in the intelligence community,

that he wrote much of his fiction as
a warning, as many authors of fiction do.

If the removal of all the good
delivery gold from Fort Knox

can be viewed as a deliberate
raid on the U.S. treasury,

then such an operation might well
have been years in the making.

Namely, 40 years.

Certainly enough time for Fleming to
get wind of it and try to prevent it.

So just how did the story of the
Fort Knox gold robbery get out?

It all started with an article
in a NY periodical in 1974.

The article charged that the Rockefeller
family was manipulating the Fed

to sell off Fort Knox gold
at bargain-basement prices

to anonymous European speculators.

Three days later, the
anonymous source of the story,

Louise Auchincloss Boyer,
mysteriously fell to her death

from the window of her
10th floor apartment in NY.

How had Mrs. Boyer known

of the Rockefeller connection
to the Fort Knox gold heist?

She was the long-time
secretary of Nelson Rockefeller.

For the next 14 years, this man,
Ed Durell, a wealthy Ohio industrialist,

devoted himself to a quest for
the truth concerning the Fort Knox gold.

He wrote thousands of letters to over
1000 government and banking officials

trying to find out
how much gold was really left

and where the rest of it had gone.

Edith Roosevelt, the granddaughter
of president Teddy Roosevelt,

questioned the actions of the government
in a March 1975 edition

of the New Hampshire's Sunday news:

Unfortunately, Ed Durell never did
accomplish his primary goal:

a full audit of the
gold reserves in Fort Knox�

It's incredible that the world's greater
treasure has had little accounting or auditing.

This gold belonged to the American people,

not to the Federal Reserve
and their foreign owners.

One thing is certain: the government
could blow all of this speculation away

in a few days with a well publicized audit

under the searing lights of media cameras.

It has chosen not to do so.

One must conclude that
they are afraid of the truth

such an audit would reveal.

What is the government so afraid of?

Here is the answer: when president
Ronal Reagan took office in 1981,

his conservative friends
urged him to study the feasibility

of returning to a gold standard

as the only way to
curb government's spending.

It sounded like a reasonable alternative,

so president Reagan appointed a group of men
called the "Gold Commission",

to study the situation
and report back to Congress.

What Reagan's Gold Commission
reported back to Congress in 1982,

was the following shocking
revelation concerning gold:

the U.S. treasury owned no gold at all.

All the gold that was left in Fort Knox,

was now owned by the Federal Reserve,

a group of private bankers,
as collateral against the national debt.

The truth of the matter
is that never before

had so much money been stolen from
the hands of the general public

and put into the hands of
a small group of private investors:

the Money Changers.

I'm standing in front of the headquarters
of the International Monetary Fund,

located in Washington D.C.

Across the street, right over there,
is the headquarters of the World Bank.

What are these organizations?
Who controls them?

And, most importantly, are they about to create

a huge worldwide depression?

Let us step back in time for a moment
to the aftermath of WW I.

People were tired of war.

So, under the guise of peacemaking,

the international bankers devised the plan

to consolidate power even further.

Claiming only an international government
would stem the tide of world wars,

the Money Changers pushed forward
a proposal for world government,

which stood on three legs:

a world central bank, to be called
the Bank of International Settlements,

a world judiciary, to be called the world court
located in The Hague in the Netherlands

and a world executive and legislator,
to be called the League of Nations.

As president Clinton's mentor,
Georgetown historian Carrol Quigley,

wrote in his 1966 book "Tragedy and Hope":

Despite intense pressure from
the international bankers and the press,

a handful of U.S. senators,
lead by senator Henry Cabot Lodge,

kept the U.S. out of these schemes.

Without U.S. participation,
the League was doomed.

Incredibly, even though the U.S.
rejected the World Central Bank, the BIS,

the NY Federal Reserve
ignored its government

and arrogantly sent
representatives to Switzerland

to participate in
the central bankers' meetings

right up until 1994,

when the U.S. was finally
officially dragged into it.

Their World Government's schemes thwarted,

the bankers resorted to the old formula:

another war to wear down
the resistance to world government

while reaping handsome profits.

To this end, Wall Street
helped resurrect Germany

through the Thyssen Banks,

which were affiliated with
the Harriman interests in NY,

just as the Chase Bank
had assisted in the financing

of the Bolshevik revolution
in Russia during WW I.

Chase Bank was controlled
by the Rockefeller family.

Subsequently, it was merged
with Warburg's Manhattan Bank

to form the Chase-Manhattan Bank.

Now, this has merged with Chemical Bank of NY

making it the largest Wall Street bank.

Their strategy worked:
even before WW-II was over,

world government was back on track.

In 1944 at Bretton Woods, New Hampshire,

the IMF and the World Bank were
approved with full U.S. participation.

The second League of Nations,
renamed the United Nations,

was approved in 1945.

Soon a new international court
system was functioning as well.

All effective opposition to these
international bodies before the war

had evaporated in the heat of war,
just as planned.

These new organizations simply
repeated on a world scale

what the National Banking Act of 1864

and the Federal Reserve Act of 1913

had established in the U.S.

They created a baking cartel
composed of the world's central banks,

which gradually assumed the power
to dictate credit policies

to the banks of all the nations.

For example, just as the Federal Reserve Act

authorized the creation of
a new national 'fiat' currency

called Federal Reserve notes,

the IMF has been given the authority
to issue a world fiat money

called Special Drawing Rights, or SDRs.

To date, the IMF has created an
excess of $30 billion worth of SDRs.

Member nations have been pressured
to make their currencies

fully exchangeable for SDRs.

In 1968, Congress approved laws

authorizing the Fed to accept
SDRs as reserves in the U.S.

and to issue Federal Reserve
notes in exchange for SDRs.

What does that mean?

It means that in the U.S., SDRs
are already a part of our lawful money.

And what about gold?

SDRs are already partially backed by gold,

and with 2/3 of the world's gold
now in the hands of Central Banks,

the Money Changers can go about
structuring the world's economic future

in whichever way they deem most profitable.

Keep in mind: just as the Fed is
controlled by its board of governors,

the IMF is controlled by
its board of governors,

which are either the heads
of the different Central Banks

or the heads of the various
national treasury departments,

dominated by their Central Banks.

Voting power in the IMF
gives the U.S. and the U.K.,

that is to say the Fed
and the Bank of England,

effective control.

Just as the Fed controls
the amount of money in the U.S.,

the BIS, IMF and World Bank
control the money supply for the world.

So we see the repetition of
the old goldsmiths' fraud,

replicated on the national scale,
with Central Banks like the Fed,

and on the international scale by
the three arms of the World Central Bank.

Is this organization of the BIS,
the IMF and the World Bank,

which we refer to collectively
as the "World Central Bank",

presently expanding and
contracting world credit?

Yes.

Regulations put into effect
in 1988 by the BIS

required the world's bankers
to raise their capital and reserves

to 8% of liabilities by 1992.

Increased capital requirements
put an upper limit

to the fractional reserve lending

similar to the way
cash reserve requirements do.

What has this seemingly
insignificant regulation,

made in a Swiss city 8 years ago,
meant to the world?

It means our banks cannot loan
more and more money

to buy more and more time
before the next depression

as a maximum loan ratio is now set.

It means those nations with the
lowest bank reserves in their systems

have already felt the terrible
effects of this credit contraction

as their banks scramble to raise
money to increase their reserves to 8%.

To raise the money, they had to sell stocks,

which depressed their stock markets

and began the depression
first in their countries.

Japan, which in 1988 had among the
lowest capital and reserve requirements,

and thus was the most
affected by the regulation,

has experienced the financial crash,
which began almost immediately in 1989,

which has wiped out a staggering 50%
of the value of its stock market since 1990

and 60% of the value of
its commercial real estate.

The Bank of Japan has
lowered its interest rates to 0.5%,

practically giving away money
to resurrect the economy,

but still the depression worsens.

Due to the $20 billion U.S.
bailout of Mexico,

the financial collapse in
that nation is already known here.

Yet, despite the bailout,
the economy continues to be a disaster.

One huge debt after another is rolled over,

as new loans are being made
simply to enable Mexico

to pay the interests on the old loans.

In the south of Mexico,
the poor have been in open revolt,

as every spare peso has
been siphoned out of the country

to make interest payments.

It is important to note

that a radical transfer
of power is taking place

as nations become subservient to
a supra-national World Central Bank,

controlled by a handful of
the world's richest bankers.

As the IMF creates more and more SDRs
by the stroke of a pen on IMF ledgers,

more and more nations borrow them
to pay interests on their mounting debts

and gradually fall under the control

of the faceless bureaucrats
of the World Central Bank.

As the worldwide depression
worsens and spreads,

this will give the WCB the power of
economic life and death over these nations.

It will decide which nations
will be permitted to receive further loans

and which nations will starve.

Despite all the rhetoric about
development and the alleviation of poverty,

the result is a steady transfer
of wealth from the debter nations

to the Money Changers' Central Banks,

which control the IMF and the World Bank.

For example, in 1992,
the third world debter nations,

which borrowed from the World Bank,

paid $198 million more to the central banks
of the developed nations

for World Bank funded purposes,

then they received from the World Bank.

All this increases their permanent debt

in exchange for temporary relief
of poverty caused by prior borrowings.

Already, these repayments
exceed the amount of the new loans.

By 1992 Africa's external
debt had reached $290 billion,

2.5 times greater then in 1980,

resulting in skyrocketing
infant mortality rates

and unemployment,
deterioration of schools, housing

and the general health of the people.

The entire world
faces the immeasurable suffering

already destroying the
third world and now Japan,

all for the benefit of the Money Changers.

As one prominent Brazilian politician put it:

Although it would be absurd
to ignore the pivotal role

played by influential families such as

the Rothschilds, the Warburgs, the Shiffs,
the Morgans and the Rockefellers,

in any review of the history of
central banking and fractional banking,

keep in mind: by now, central banks
and the large commercial banks

are up to three centuries old
and deeply entrenched

in the economic life of many nations.

These banks are no longer
dependent on clever individuals

such as a Nathan Rothschild.

Years ago, the question of ownership
was important, but no longer.

For example, both the Bank of England
and the Bank of France

were nationalized after WW-II
and nothing changed,

nothing at all.

They endure and continue to grow
now protected by numerous laws,

paid politicians and mortgaged media,

untouched by the changing of generations.

Three centuries have given them
an aura of respectability;

the old-school tie is now
worn by the sixth generation son,

who has been raised in a system
that he may never question

as he is named to
serve on the governing boards

of countless philanthropic organizations.

To focus attention today
on individuals or families

or to attempt to sort out
the current holders of power,

serves little useful purpose and
would be a distraction from the cure.

The problem is far bigger than that.

It is the corrupt banking
system that was and is

being used to consolidate vast wealth
into fewer and fewer hands,

that is our current economic problem.

Change the names of the main players now,

and the problem would neither go away,
nor even miss a beat.

Likewise, among the hordes of
bureaucrats working in the World Bank,

central banks and international banks,

only a tiny fraction have
any idea of what's really going on.

No doubt they'd be horrified to learn

that their work is contributing
to the terrible impoverishment

and gradual enslavement of mankind
to a few, incredibly rich plutocrats.

So really, there is no use in emphasizing
the role of individuals anymore.

And the problem even transcends the normal
spectrum of political right and left.

Both, communism and socialism,
as well as monopoly capitalism

have been used by the Money Changers.

Today they profit from either side
of the new political spectrum:

the big government welfare state
on the so-called left wing,

vs. the neo-conservative
laissez-faire capitalists

who want big government totally
out of their lives, on the right wing.

Either way the bankers win.

Monetary reform is the most important
political issue facing this nation.

That clarified, let's proceed to the
conclusions in the spirit Lincoln declared:

"with malice towards none,
with charity towards all".

At the start of this video,
we asked a number of troubling questions.

Let's be sure we've answered them.

What's going on in America today?

Why are we over our heads in debt?

Why can't the politicians
bring debt under control?

Why are we over our heads in debt?

Because we're labouring
under a debt money system,

that is designed and
controlled by private bankers.

Some will argue that
the Federal Reserve system

is a quasi-governmental agency.

But the president appoints
only two of the seven members

of the Fed's board
of governors every four years.

And he appoints them to 14 year terms,
far longer than his own.

The senate does confirm those appointments,

but the whole truth is
that the president wouldn't dare

appoint anyone to that board of
whom Wall Street does not approve.

Of course, this does
not preclude the possibility

that some honourable men may be
appointed to the board of governors.

But the fact is that
the Fed is specifically designed

to operate independently of our government

as are nearly all other central banks.

Some argue that the Fed
promotes monetary stability.

We saw the current head of
the Bank of England, Eddie George,

claim that this was the most
important role of a central bank.

In fact, the Fed's record
of stabilizing the economy,

shows it to be a miserable
failure in this regard.

Within the first 25 years of its existence,

the Fed caused three major economic downturns,
including the great depression,

and for the last 30 years
has shepherded the American economy

into a period of unprecedented inflation.

Again, this is not
some wild conspiracy theory;

it's a well known fact among top economists.

As Nobel price-winning economist
Milton Friedman put it:

We must learn from our history
before it is too late.

Why can't politicians
control the federal debt?

Because all our money
is created out of debt.

Again, it's a debt-money system.

Our money is created initially
by the purchase of U.S. bonds.

The public buys bonds, like savings bonds,

the banks buy bonds, foreigners buy bonds,

and when the Fed wants to
create more money in the system,

it buys bonds but pays for them
with a simple bookkeeping entry,

which it creates out of nothing.

Then, this new money created by the Fed

is multiplied by a factor of ten by the banks,

thanks to the fractional reserve principle.

So, although the banks don't create currency,

they do create check book money,
or deposits, by making new loans.

They even invest some of this created money.

In fact, over one trillion dollars
of this privately-created money

has been used to purchase U.S.
Bonds on the open market,

which provides the banks with roughly
50 billion dollars in interest,

risk free, each year, less the
interest they pay some depositors.

In this way, through
fractional reserve lending,

banks create over 90% of the money,

and therefore cause over 90%
of our inflation (approximately 97%).

What can we do about all this?

Fortunately, there's a way to
fix the problem fairly easily,

speedily, and without
any serious financial problems.

We can get our country
totally out of debt in 1-2 years

by simply paying off U.S. bonds
with debt-free U.S. Notes,

just like Lincoln issued.

Of course, that by itself
would create tremendous inflation,

since our currency is presently multiplied

by the fractional reserve banking system.

But here's the ingenious solution
advanced in part by Milton Friedman

to keep the money supply stable

and avoid inflation and deflation
while the debt is retired.

As the Treasury buys up its bonds
on the open market with U.S. Notes,

the reserve requirements
of your hometown local bank

will be proportionally raised

so the amount of money in
circulation remains constant.

As those holding bonds
are paid off in U.S. Notes,

they will deposit this money,
thus making available the currency

then needed by the banks
to increase their reserves.

Once all the U.S. bonds
are replaced with U.S. Notes,

banks will be at 100% reserve banking,

instead of the fractional reserve
system currently in use.

From this point on, the former
Fed buildings will only be needed

as a central clearing houses for checks,
and as vaults for U.S. Notes.

The Federal Reserve Act will
no longer be necessary, and could be repealed.

Monetary power could be transferred
back to the treasury department.

There would be no further creation
or contraction of money by banks.

By doing it this way, our national debt
can be paid off in a single year or so,

and the Fed and fractional
reserve banking abolished

without national bankruptcy,
financial collapse, inflation or deflation,

or any significant change in the way
the average American goes about his business.

To the average person,
the primary difference would be

that for the first time since the
Federal Reserve Act was passed in 1913,

taxes would begin to go down.

Now there's a real national blessing for you,

rather than for Hamilton's banker friends.

Now, let's take a look at
these proposals in more detail.

Here are the main
provisions of a Monetary Reform Act,

which needs to be passed by Congress.

We've drafted a proposed Monetary Reform Act,

which follows at the end of this tape.

Of course, variations with the same
results would be equally welcome.

As Thomas Edison put it,
if the U.S. can issue a dollar bond,

it can issue a dollar bill.

They both rest purely on the faith
and credit of the U.S. government.

This amounts to a simple substitution of
one type of government obligation for another.

One bears interest, the other doesn't.

Federal Reserve Notes could
be used for this as well,

but could not be printed after
the Fed is abolished, as we propose,

so we suggest using U.S. Notes instead,

to absorb the new U.S. Notes,

which would be deposited and
become the banks' increased reserves.

Towards the end of the first year
of the transition period,

the remaining liabilities
of financial institutions

would be assumed or acquired by the
U.S. government in a one-time operation.

In other words, they too would eventually
be paid off with debt-free U.S. Notes,

in order to keep the
total money supply stable.

At the end of the first year, or so,
all of the national debt would be paid,

and we could start enjoying the
benefits of full-reserve banking.

The Fed would be obsolete, an anachronism.

3. Repeal of the Federal Reserve Act of 1913

and the National Banking Act of 1864.

These acts delegate the money power
to a private banking monopoly.

They must be repealed and
the monetary power handed back

to the Department of the Treasury,

where they were initially,
under President Abraham Lincoln.

No banker or person in any way
affiliated with financial institutions

should be allowed to regulate banking.

After the first two reforms,

these Acts would serve
no useful purpose anyway,

since they relate to a
fractional reserve banking system.

These institutions, like the Federal Reserve,

are designed to further centralize the power

of the international bankers
over the world's economy

and the U.S. must withdraw from them.

Their harmless functions
such as currency exchange

can be accomplished either nationally,

or in new organizations
limited to those functions.

Such a Monetary Reform Act would guarantee

that the amount of money in circulation
would stay very stable,

causing neither inflation nor deflation.

Remember: for the last three decades

the Fed has doubled the American
money supply every 10 years.

That fact and fractional reserve banking
are the real causes of inflation

and the reduction in our buying power,
a hidden tax.

These and other taxes are the real reasons

both parents now have to work just to get by.

The money supply should increase
slowly to keep prices stable,

roughly in proportion to population
growth, about 3% per year,

not at the whim of a group
of bankers meeting in secret.

In fact, all future decisions on how much
money would be in the American economy

must be made based on
statistics of population growth

and the price level index.

The new monetary regulators
and the treasury department,

perhaps called the Monetary Committee,

would have absolutely
no discretion in this matter

except in time of declared war.

This would ensure a steady, stable
money growth of roughly 3% per year,

resulting in stable prices and no
sharp changes in the money supply.

To make certain the process
is completely open and honest,

all deliberations would be public, not secret

as meetings of the Fed's
board of governors are today.

How do we know this would work?

Because these steps remove the two
major causes of economic instability:

the Fed and fractional reserve banking

and the newest one as well, the BIS,
Bank of International Settlements.

But, most importantly, the danger of
a severe depression would be eliminated.

Let's listen to Milton Freedman
on the single cause

of severe economic depressions:

Issuing our own currency,
is not a radical solution.

It's been advocated by Presidents Jefferson,

Madison, Jackson, Van Buren and Lincoln.

But has been used at different
times in Europe as well.

Perhaps the best example
is one of the small islands

off the coast of France
in the English Channel.

Called Guernsey, it has been
using debt-free money issues

to pay for large building
projects for nearly 200 years.

Here we are in Guernsey,

and this is the Guernsey
flower and vegetable market.

Guernsey is one of the most
successful examples of just how well

a debt-free money system can work.

In 1815, a committee was
appointed to investigate

how best to finance this new market.

The impoverished island
could not afford more new taxes,

so the State's fathers decided
to try a revolutionary idea:

issue their own paper money.

They were just colourful paper notes,
backed by nothing,

but the people of this tiny island
agreed to accept them and trade with them.

To be sure they circulated widely,

they were declared to be "good
for the payment of taxes".

Of course this idea was nothing new.

It was exactly what America had
done before the American Revolution

and there are many other
examples throughout the world.

But it was new to Guernsey,
and it worked miracles.

This market is still in use, and remember,

it was built for no debt to the
people of this island state.

But what if we follow Guernsey's example?

How would the bankers react to these reforms?

Certainly the international bankers'
cartel will oppose reforms

that do away with their
control of the world's economies,

as they have in the past.

But it is equally certain that Congress

has the Constitutional
authority and responsibility

to authorize the issuance of
debt free money, U.S. Notes,

and to reform the very banking
laws it ill-advisedly enacted.

Undoubtedly, the bankers will
claim that issuing debt-free money

will cause severe inflation
or make other dire predictions,

but remember, it is fractional reserve banking

which is the real cause of
over 90% of all inflation

not whether debt-free U.S. Notes are
used to pay for government deficits.

In the current system, any spending
excesses on the part of Congress,

are turned into more debt bonds,

and the 10% purchased by the Fed,

are then multiplied
many times over by the bankers,

causing over 90% of all inflation.

Our fractional reserve and
debt-based banking system is the problem.

We must ignore its
inevitable resistance to reform

and remain firm until the cure is complete.

As the director of the Bank of England
in the 1920s, Sir Josiah Stamp put it,

referring to this modern
fractional reserve banking system:

Americans are slowly figuring this out.

Today, over 3,200 cities and
counties have endorsed the proposal

of a non-profit organization called "Sovereignty".

The Sovereignty movement calls for Congress

to authorize the secretary of the treasury
to issue $90 billion per year of U.S. Notes,

not Fed notes nor debt-based bonds,

to loan money, interest-free, to cities,
counties and school districts

for needed capital improvements.

Remarkably, and to their praise, the
community bankers association of Illinois,

representing 515 member banks, has
endorsed this Sovereignty proposal,

a good step in the right direction.

As Milton Friedman has
repeatedly pointed out,

no severe depression can occur
without a severe contraction of money.

In our system, only the Fed, the BIS,
with U.S. bankers cooperation

or a combination of
the largest Wall Street banks

could cause a depression.

In other words, our economy
is so huge and resilient

a depression just can't happen by accident.

Unless we reform our banking system,
they will always have that power.

They can pull the plug on
our economy any time they choose.

The only solution is to abolish the Fed

and the fractional reserve banking system

and withdraw from the BIS.

Only that would brake the power of
the international bankers over our economy.

And keep in mind, a stock market crash itself

cannot cause a severe depression.

Only the severe contraction
of our money supply

can cause a severe depression.

The stock market crash of 1929
only wiped out market speculators,

mostly the small and the medium ones,

resulting in $3 billion
in wealth changing hands.

But it served as a smoke screen
for a 33% contraction

in credit by the Fed over the next 4 years,

which resulted in over $40 billion of
wealth from the American middle class

being transferred to the big banks.

Then, despite impotent howls of
protest from a divided Congress,

the independent Fed kept the money
supply contracted for a full decade.

Only WW-II ended the terrible suffering
the Fed inflicted on the American people.

In a depression, the remaining wealth
of the debt-burdened American middle class

would be wiped out by unemployment,
declining wages and the resulting foreclosures.

If we start to act to
reform our monetary system,

the Money Changers may do what they
did in 1929 and then the 1930s:

crash the stock market and
use that as a smoke screen

while contracting the money supply.

But if we're determined to fight
to regain control over our money,

we can come out of it fairly quickly,
perhaps in only a very few months,

as U.S. Notes begin to circulate and
replace the money withdrawn by the bankers.

The longer we wait, the greater the danger

we'll permanently lose control of our Nation.

But some still wonder
why the international bankers

would want to cause a depression.

Wouldn't that be killing
the goose that is currently

laying all those golden interest eggs?

Remember what Larry Bates said
at the first of this videotape:

"In periods of economic crisis, wealth
is not destroyed, it is merely transferred".

Do we have any hints as to what
the Money Changers have in store for us?

Here is what David Rockefeller,
the chairman of Chase-Manhattan Bank,

the largest Wall Street bank, had to say:

So, crisis is needed to
fulfil their plans quickly.

The only question is
when the crisis will occur.

Fortunately, we probably have a little time.

It's unlikely that this crisis will
occur before the 1996 elections

but after that, the danger begins rising.

But whether or not they decide
to cause a crash or depression

through relentless increases
in taxes and the loss

of hundreds of thousands of
jobs being sent overseas,

thanks to trade agreements
such as GATT or NAFTA,

the American middle class
is an endangered species.

Cheaper labour, including
slave labour in red China,

which Harry Wu has heroically documented,

is being used to
compete with American labour.

In other words, money is being
consolidated in fewer and fewer hands

as never before in the history
of this nation or the world.

Without reform, the American
middle class will soon be extinct,

leaving only the very rich few
and the very many poor

as has already occurred in most of the world.

We've been warned of all this
by Congressmen, presidents,

industrialists and economists
down through the years.

Religious leaders too, have seen the danger.

About 1898, during the time of William
Jennings Bryan, Pope Leo XIII put it this way:

More recently, during America's great depression,

Pope Pius XI spoke of the same problem:

Educate your friends.

Our country needs a solid group who
really understand how our money is manipulated

and what the solutions really are,
because, if a depression comes,

there will be those who will
call themselves conservatives

who will come forward advancing solutions
framed by the international bankers

Beware of calls to
return to a gold standard.

Why?

Simple: because never before has
so much gold been so concentrated

outside of American hands.

And never before has
so much gold been in the hands

of international governmental
bodies such as the World Bank

and International Monetary Fund.

A gold-backed currency
usually brings despair to a nation

and to return to it would certainly
be a false solution in our case.

Remember, we had a
gold-backed currency in 1929

and during the first four
years of the great depression.

Likewise, beware of any plans advanced
for a regional or world currency:

this is the international bankers' Trojan horse.

Educate your member of Congress.

It only takes a few persuasive members
to make the others pay attention.

Most Congressmen just
don't understand the system.

Some understand it, but are so
influenced by bank PAC contributions

that they ignore it, not realizing
the gravity of their neglect.

We hope we have made a valuable contribution

to the national debate on monetary reform.

It remains for each man to do his duty,
consistent with his state in life.

May God give us the light to help
reform our nation, and ourselves.

We say ourselves, because
ultimately vast multitudes of men

are going to be driven
more and more to desperation

by the accumulation of the world's wealth
in fewer and fewer hands.

Men will tend to become
like their oppressors, selfish and greedy.

Rather, let's keep in mind,
during this period of reform,

a warning not to lose sight of greater things.

As Pope Pius XI put it: