Central Banks, Global Economic & Political Control
Part 3 of the Economic Series
Part 1, Economics as a Political and Control Weapon, and Part 2, Money - The Ultimate Weapon, show how the world is run more by corrupt pseudo-economics for the benefit of 0.1% of the population than by sound, scientific economic and financial principles that produce optimum financial health and prosperity for everyone.
Part 2 briefly referenced how central banks fit within pseudo-economics. This article gives more details on the powerful role central banks play in world politics and economics.
A central bank is an institution responsible for setting and implementing monetary policies within a nation or group of nations, managing the currency of a nation or group of nations, and controlling the money supply. Central banks determine interest rates and create new money. They are independent of governments, and actually are ‘above’ governments because of the financial power they wield.
Central banks include the Federal Reserve, European Central Bank, Bank of England, Bank of Japan, Swiss National Bank, Bank of Canada, Reserve Banks of Australia and New Zealand, Bank of China and others.
This article focuses on the Federal Reserve, Bank of England and European Central Bank, as three of the most powerful financial institutions in the world. But the same systems, processes, mechanisms and intentions apply to all other central banks as well (with the possible exception of the Bank of China; the Bank of China operates according to its own agendas).
As shown in Part 2, central banks - and all commercial banks as well - create money from nothing, backed by nothing. Part 2 shows how this creation of money out of thin air is exponential. While this often provides short term benefits and ‘stimulus,’ this type of fiat money always produces negative effects in the longer term, effects that far outweigh any short term gains for the vast majority of people. Only a tiny percentage of the population benefits in both the short and long terms from this exponential creation of fiat money - those who are ‘plugged into’ the system.
“Central banking is more influential than laws, governments and politicians - but strangely, not the focus of the general public.
“. . . The Bank of Japan's controversial march to the top of the shareholder rankings in the world's third-largest equity market is picking up pace. Already a top-five owner of 81 companies in the Nikkei 225 stock average, the BOJ is on course to become the No. 1 shareholder in 55 of those firms.”
“. . . The bank [Bank of England] hath benefit of interest on all moneys which it creates out of nothing.” - William Paterson, founder of the Bank of England in 1694.
“. . . Let me issue and control a nation’s money and I care not who writes the laws.” -Mayer Amschel Rothschild (1744-1812), founder of the House of Rothschild.
“. . . Give me the power to issue a nation’s money; then I do not care who makes the law.” - Anselm Rothschild (1803-1874)
“. . . The Federal Reserve is an independent agency, and that means there is no other agency of government which can overrule the actions that we take. Those [government] relations don’t frankly matter.” - Alan Greenspan, former Chairman of the Federal Reserve
The actions of central banks have widened the gap between the super wealthy and poor-to-upper-middle classes - by an enormous amount. For example, $42 trillion in new money has been created in the world since 2020 (all ‘fiat’ money, as discussed in Part 2). The richest 1% of people accumulated 63% of that - $26 trillion. Central banks contributed significantly - if not mainly - to this ever-widening disparity.
Bank of England
The Bank of England was the first central bank of the modern world, founded in 1694. It was privately owned, printed the nations’ paper currency, and became a lender to the British government. (Central bank ability to loan money to governments is one of the major sources of their immense political and financial power.)
Britain was the most powerful nation on earth until WW I, from an international standpoint. Up to WW II, Britain was the financial leader of the world. The United States had a larger and stronger economy, but hadn’t yet become the dominant international power until the end of WW II. And even after WW II and during the rise of the U.S. to global dominance, London (and the City of London, a separate city within London) remained key financial hubs of the world even to this day.
The Bank of England reflected and contributed to that financial power from its inception until the 1990s, and still carries influence within the economic world. But as with all central banks, the Bank of England works more for itself and its own wealth accumulation than it does for the United Kingdom.
“If you listened to some government ministers, you might assume that there’s a fixed amount of money in the economy, or that the amount is strictly controlled by the Bank of England.
“But in fact, money is being created out of thin air all the time. And this process has hugely important implications for issues like housing, inequality and the environment.
“Most of the money we use comes in digital form, as the numbers we see on our bank statements. This money is created by private banks like HSBC and Natwest when they make loans. They create it by simply typing numbers into a computer – some might call this magic!
“Sound implausible? You don’t have to take our word for it – the Bank of England itself has confirmed that ‘whenever a bank makes a loan, it creates a deposit in the borrower’s bank account, thereby creating new money.’
[Bank of England] policy has done very little for ordinary people, but the Bank of England’s own research has shown that quantitative easing made the richest 5% over £128,000 richer. So at a time when politicians are using the absence of a ‘magic money tree’ to justify austerity, the Bank of England policies are enriching a wealthy few.”
The Federal Reserve
Much of this article deals with the Federal Reserve, for two reasons: (1) due to the financial and political weight the U.S. carries in the world, and (2) because most of what goes on with the Reserve Reserve is also true of other central banks. So the Fed is representative of how most central banks operate.
It’s important to know the true, original but obscured intentions behind creation of the Federal Reserve system, because those original intents and purposes carried forward to the present - and are still unknown to the vast majority of people, even after more than 110 years.
“The battle over a central bank is an issue that goes back to the beginning of America. The Federalists, led by Alexander Hamilton, wanted the new American government to resemble the British Empire - with their own Bank of England.
“They were opposed by Jeffersonian Republicans, who understood a central bank to be a dangerous institution of corruption that would benefit a politically connected minority.
“Both sides saw their share of victories and defeats, leading to the establishment of the First Bank of the United States under Washington, ended by Jeffersonians in 1811. A Second Bank of the United States was created in 1815, and then ended by Andrew Jackson in 1836.
“After a particularly bad financial crisis in 1907, the result of bad banking policies first imposed during the Civil War, major Wall Street banks decided to promote the creation of a new central bank that could be depended on to bail them out during a financial crisis.
“The Wall Street bankers and their allied politicians understood that it would be difficult to get the American public to create such a powerful and dangerous government tool. In planning the creation of this new bank, they met in secret locations — like Jekyll Island, Georgia — using fake names. They plotted a national propaganda campaign to sell the public and elected officials on the plan by any means necessary.
“In 1912, Woodrow Wilson was elected president. A year later, he would sign into law the creation of the Federal Reserve.
That short video is a somewhat ‘sanitized’ version of why the Federal Reserve was formed. But the basic facts presented are accurate, and the reasons given publicly for the formation of the Federal Reserve were certainly valid. And, the economic situations described in the video did exist.
But like most (if not all) crises, powerful and extremely wealthy individuals took advantage of the situation to greatly enrich themselves even more, financially and politically, and for their future generations.
The formation of the Federal Reserve was conceived and designed in secret (presented below). The true intentions behind the Federal Reserve as envisioned by its founders were hidden intentionally, because Congress and the American people would never have allowed the Fed if they knew the true purposes behind it. This central bank system was sold to Congress with a combination of fear-mongering, public relations sales pitches and even gaslighting propaganda.
But their sales pitches and propaganda were brilliant, because they alluded to actual economic conditions that existed at the time. The most convincing lies are those built around kernels of truth.
Even the name given to this central bank, Federal Reserve, was strategically and smartly chosen to give the impression that it was part of the U.S. federal government. The Federal Reserve is not a federal agency. It is not part of the U.S. government in any way; it is totally independent and actually operates above the government. The Fed isn’t accountable to shareholders or voters, as explained below.
Eventually, after a few short years of smart sales pitches and propaganda, first Congress and then the American people bought into the Federal Reserve system.
The masterminds who conceived the Federal Reserve were John D. Rockefeller, J.P. Morgan, Paul Warburg, Senator Nelson Aldrich, and a handful of key bankers and close allies of Morgan, Rockefeller and Warburg.
Rockefeller, Morgan and Warburg were three of the wealthiest men on the planet. Combined, these founders of the Federal Reserve system represented an estimated 25% of the total wealth of the world at that time. (Rockefeller, Morgan and Warburg were also friends and close allies with the Rothschilds, who were likely the wealthiest family in the world at the time, although not officially recognized as such.)
“The Federal Reserve Act of 1913 actually got its start three years earlier, at a clubhouse at Jekyll Island, Georgia, in November 1910. The Jekyll Island Club was the site of a secret meeting of the nation's top bankers and financiers to hammer the details of a central bank for the United States.
“Shortly after the meeting, Senator Nelson Aldrich introduced his plan for a ‘National Reserve Association.’ The plan was initially shot down. However, after the election of Woodrow Wilson in 1912, the plan, after undergoing some revision, passed Congress [as the Federal Reserve Act] and received the President's signature on December 23, 1913: the birthdate of the Federal Reserve System.
“Attendees at the Jekyll Island meeting included:
Henry P. Davison, senior partner of J.P. Morgan & Co.
Charles D. Norton, president of Morgan-dominated First National Bank of NY
Benjamin Strong, vice president of Morgan-dominated Bankers Trust of NY
Paul Warburg, representative of Kuhn, Loeb & Co., director at Wells Fargo, and member of the immensely wealthy Warburg family banking dynasty in Europe
Frank A. Vanderlip, president of Rockefeller-dominated National City Bank of NY
Senator Nelson Aldrich, close ally and friend of Rockefeller
A. Piatt Andrew, economist”
“I was as secretive - indeed, as furtive - as any conspirator. Discovery, we knew, simply must not happen, or else all our time and effort would be wasted. If it were to be exposed that our particular group had got together and written a banking bill, that bill would have no chance whatever of passage by Congress.” - Frank A. Vanderlip, in 1935 referring to the secret meeting at Jekyll Island
Although Rockefeller and Morgan didn’t attend this particular meeting, they were still key founders and drivers of the Federal Reserve system created.
Congress later issued a ‘dual mandate’ to the Federal Reserve:
Promote maximum employment
Maintain stable prices
As part of this mandate and over time, Congress has allowed the Federal Reserve to
establish monetary policies to accomplish their dual mandate
set interest rates as part of monetary policies
take other actions to promote optimum economic conditions within the U.S.
These are broad and respectable responsibilities. But these are what a central bank is technically supposed to accomplish. I write ‘technically’ because those original purposes and intents have been warped and corrupted - or were just gaslighting sales pitches in the first place.
Also technically speaking, the Federal Reserve is supposed to answer to Congress. Congress passed the Federal Reserve Act, and technically has authority over the Federal Reserve. Congress technically has the power to abolish the Federal Reserve Act and Federal Reserve itself.
But in reality, that paper authority is meaningless; Congress has abdicated its constitutional role, responsibilities and power in favor of several powerful interest groups - global and central bankers being one of those groups. While it’s true that the Federal Reserve Board governors and chairmen are proposed by U.S. presidents and approved (or not) by Congress, this is a mere formality. The truth is that Federal Reserve governors and chairmen are hand-picked by powerful ‘elites’ outside of government to whom presidents and Congress answer, and presidents and Congress are expected to rubber-stamp their approvals (as they usually do.)
(Congressional corruption, treason and trashing of the U.S. Constitution need an entire book to document.)
In reality, the Federal Reserve answers to no one but itself, in coordination with other central and international banks in the world.
“The Federal Reserve represented wonderful hopes, but we've had so many programs that represented wonderful hopes that ended in disaster.
“Q: Would you abolish the Fed?
“A: Yes
“Q: What would you replace it with?
“A: When someone removes a cancer, what do you replace it with?”
- Dr. Thomas Sowell
The video below presents the best and most accurate description of the Federal Reserve, and highlights the difference between what the Fed is supposed to do and what it actually does:
“The Federal Reserve System is a strange creature. Most people think it's a government agency; it is not. Those who have studied it say it is a private banking corporation, but it's not really a private corporation either.
“It's a hybrid, and to make it more complicated we can say it is a banking cartel. This is the amazing thing: the Federal Reserve system is a banking cartel - no different than a banana cartel, or an oil cartel or sugar cartel. It just happens to be a banking cartel.
“It's a group of very large and powerful private banking interests who have gotten together in a cartel arrangement, and they brought the federal government into it as a partner in order to use the force of law to enforce the the cartel agreement.
“. . . And so we come to the amazing conclusion that the Federal Reserve system is basically a banking cartel that has gone into partnership with the federal government of the United States, so that the federal laws can be used to enforce the cartel agreement.
“That’s a real shock! . . . I thought the Federal Reserve was an agency of the government, and that it was formed to protect the people, to protect you and to protect me, to stabilize the economy, to make sure we didn’t have too much inflation or unemployment or all these bad things. But they operate to help themselves.”
- G. Edward Griffin, author of The Creature from Jekyll Island
The video below presents more details as to how the Federal Reserve - and other central banks as well - not only create money out of thin air, from nothing, but also are significant causes of the very economic upheavals they are supposed to prevent (such as recessions, depressions, volatile cycles, uncertainty, high inflation and unemployment, and so on):
“Money for Nothing - Inside the Federal Reserve”
“100 years after its creation, the power of the U.S. Federal Reserve has never been greater. Markets and governments around the world hold their breath in anticipation of the Fed Chairman’s every word. Yet the average person knows very little about the most powerful – and least understood – financial institution on earth.
“The Federal Reserve helped cause the financial crash and crisis in 2007-2008. And we might be headed there again.”
“ ‘We [Federal Reserve] did it. We caused the Great Depression.’ - Ben Bernanke, Former Chair of the Federal Reserve 2006-2014”
The U.S. government and Federal Reserve together caused the Great Depression in 1929, and prolonged it by an additional 8-10 years because of their actions and measures to ‘reverse’ the depressed economic state they caused in the first place; the depression would have ended on its own within a year or two if the government and Fed had done nothing.
“Many volumes have been written about the Great Depression and its impact on the lives of millions of Americans. . . . Sadly, all too many of them find it easier to circulate a host of false and harmful conclusions about the events that caused the Great Depression.
“. . . Old myths never die; they just keep showing up in college economics and political science textbooks. Students are taught that unfettered free enterprise collapsed of its own weight in 1929, paving the way for a decade-long economic depression full of hardship and misery. President Herbert Hoover is presented as an advocate of ‘hands-off,’ or laissez-faire, economic policy, while his successor, Franklin Roosevelt, is the economic savior whose policies brought us recovery. This popular account of the Depression belongs in a book of fairy tales and not in a serious discussion of economic history, as a review of the facts demonstrates.
“One of the most thorough and meticulously documented accounts of the Fed’s inflationary actions prior to 1929 is America’s Great Depression by the late Murray Rothbard. Using a broad measure that includes currency, demand and time deposits, and other ingredients, Rothbard estimated that the Federal Reserve expanded the money supply by more than 60 percent from mid-1921 to mid-1929. The flood of easy money drove interest rates down, pushed the stock market to dizzy heights, and gave birth to the ‘Roaring Twenties.’
“By early 1929, the Federal Reserve was taking the punch away from the party. It choked off the money supply, raised interest rates, and for the next three years presided over a money supply that shrank by 30%. This deflation following the inflation wrenched the economy from tremendous boom to colossal bust.
“The ‘smart’ money—the Bernard Baruchs and the Joseph Kennedys who watched things like money supply—saw that the party was coming to an end before most other Americans did. Baruch actually began selling stocks and buying bonds and gold as early as 1928; Kennedy did likewise.
“When the masses of investors eventually sensed the change in Fed policy, the stampede was underway. The stock market crash was only a symptom—not the cause—of the Great Depression: the market rose and fell in near synchronization with what the Fed was doing.”
Today, the U.S. government and Federal Reserve are not only taking the same actions that caused and prolonged the Great Depression, they are compounding those errors with even more insane and harmful measures. I foresee a crash occurring within the next 5 years far worse than the 1929 depression - if these measures continue and aren’t reversed. Details and data on this point will be provided in an upcoming article in this series.
Woodrow Wilson signed the 1913 Federal Reserve Act. A few years later he wrote:
“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world; no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.” - Woodrow Wilson
And the state of affairs Wilson observed then is even worse and more true today. The U.S. and most other governments in the world have been corrupted, subverted and ruled by central and international banks, to one degree or another.
I believe the majority of people who work for governments are good, honest people with integrity who sincerely want to do the best for people; but they cannot withstand the magnitude of this massive corruption and subversion that has taken place at the top of governments and their agencies.
Once again, as noted in this article and Part 2, the Federal Reserve simply conjures up numbers in their computer ledgers and calls these ‘new money.’ They go through a ‘legitimizing’ and justification process of buying government bonds, providing loans to other banks and other such measures, but all this is theatre, it is all accounting stage magic.
Other central banks apply the same processes. As a result, 97% of all money in the world is ‘fiat money’ - money conjured out of thin air and backed by nothing but the decrees of banks and governments and their computer data banks.
European Central Bank (ECB)
Most actions taken by the Bank of England and Federal Reserve are mirrored by the European Central Bank.
This video gives a short, factual timeline of events leading up to formation of the European Union, the Euro currency and European Central Bank.
Here is the official, ‘sanitized’ version of the duties and responsibilities of the ECB, as presented to the public:
“The ECB Explained in 3 Minutes.”
Here is another sanitized, for-public-consumption description of the actions taken by the ECB following the economic crisis that began in 2007:
“What is the role and importance of the European Central Bank in the economic crisis of 2007-2015?”
The above three videos present factual but ‘sanitized’ descriptions of the ECB. But they omit the most important points - how the ECB fuels inflation, generates economic upheavals, and creates wider and wider economic disparities and injustices. Now for the rest of the story:
“How the Rich Get Richer - Money in the World Economy”
“For years, the world’s central banks have been pursuing a policy of cheap money. The first and foremost is the ECB (European Central Bank), which buys bad stocks and bonds to save banks, tries to fuel economic growth and props up states that are in debt. But what relieves state budgets to the tune of hundreds of billions annoys savers: interest rates are close to zero.
“The fiscal policies of the central banks are causing an uncontrolled global deluge of money. Experts are warning of new bubbles. In real estate, for example: it’s not just in German cities that prices are shooting up. In London, a one-bed apartment can easily cost more than a million Euro. More and more money is moving away from the real economy and into the speculative field.
“Highly complex financial bets are taking place in the global casino - gambling without checks and balances.
“The winners are set from the start: in Germany and around the world, the rich just get richer. Professor Max Otte says: ‘This flood of money has caused a dangerous redistribution. Those who have, get more.’
“But with low interest rates, any money in savings accounts just melts away. Those with debts can be happy. But big companies that want to swallow up others are also happy: they can borrow cheap money for their acquisitions. Coupled with the liberalization of the financial markets, money deals have become detached from the real economy. But it’s not just the banks that need a constant source of new, cheap money today. So do states. They need it to keep a grip on their mountains of debt. It’s a kind of snowball system. What happens to our money? Is a new crisis looming? The film The Money Deluge casts a new and surprising light on our money in these times of zero interest rates.”
Conclusion
As shown in this article and Part 2 of this series, central banks
create money from nothing, backed by nothing but blind faith, which in turn greatly increases the wealth of the world’s wealthiest 1%, usually at the expense of the remaining 99%;
dictate financial and economic policies and measures to governments and nations, rather than answer to them;
operate more for their own benefit and the benefit of their friends and allies than for the economic stability and financial health of the nations they are supposed to represent;
stand above any laws and governments, operating with no accountability to anyone but themselves; and
in conjunction with governments, are the leading cause of economic upheavals, boom-and-bust cycles, economic uncertainties, widening economic disparities and financial struggles for the majority of people.