Bill Totten's Weblog

Sunday, April 18, 2010

The Federal Reserve and Income Tax Conspiracy Theory (July 10 2007)

I read an interesting conspiracy theory on the Internet. Actually, there's no single site that tells the whole story. I pieced it together from a bunch of different bits.

During the 19th century, the international banks in Europe were really threatened by the United States. At this time, the banks in Europe effectively controlled all European governments. All countries in Europe had a corrupt monetary system and taxation system. With a fair taxation system and monetary system, all the talented people in the world would flock to the United States. The power of the USA would grow and their power would decrease.

There was another problem that concerned the large international banks. Large pools of private capital were forming, outside the control of the international banks. If someone asks an international bank for capital to start a business, the terms of the financing make the bank the effective owner of the business. With private capital pools, people could found businesses that the international banks could not control. By fixing interest rates at an artificially low level, these private capital pools would dry up. With market-determined interest rates, it's more attractive to finance a business with equity. Financing via equity means reinvested earnings or selling equity. With artificially low interest rates, it's more attractive to finance a business with debt. This even lets the international banks have a veto over which businesses succeed, because they can give cheap loans to the monopoly they support. Nowadays, selling equity is almost the same as debt financing, because the people who buy the equity borrowed the money from an international bank.

Artificially low interest rates ensure that all economic activity comes under the international banks' control. With high debt levels, artificially created boom/bust cycles allow banks to confiscate assets during recessions. In order to successfully build a business with equity financing, you have to be sufficiently efficient to overcome the advantage that large businesses get from debt financing and their size.

That's what's dangerous about the Internet. The Internet allows a new business to be founded with very little capital. The Internet makes it very easy to grow a business with equity financing. The main cost of an Internet business is software, which is created by engineers and not by bankers. A top-flight programmer can produce something that 1000 average or good programmers could not. That's why it's so important to destroy network neutrality. Individuals can't be allowed to effectively start their own businesses with equity financing.

The European banks set out to destroy the USA. Apparently, only a handful of spies were needed to completely corrupt the US government and economy. They didn't come to the USA covertly as spies. They came here openly as traveling businessmen and consultants. They explained the wonders of Europe's monetary and taxation system. They were generously helping the leaders in the USA set up a similar system here.

There was one key victory that the international bankers won before 1913. This was the Supreme Court ruling that said that corporations had the same rights as people. Corporations could own property and enforce contracts. Corporate ownership is anonymous. Anonymous corporate ownership is power without responsibility or accountability. Under current SEC rules, an ownership stake over five percent must be declared. However, a group of thirty people acting as a cartel could buy two percent each. They would be able to control the corporation without publicly declaring their ownership.

This Supreme Court ruling was the effect of decades of lobbying. Many politicians and judges were bribed. They were convinced that corporations were good. There never was a law passed that said "corporations have the same rights as people". It was a Supreme Court decision. It was a decision the original authors of the Constitution would not have approved.

Many large US banks were funded by the international European banks. Corporate ownership is anonymous. Anonymous ownership meant foreigners could control US banks. Through the banks, they were able to control everything else. They only needed to buy up or infiltrate a handful of newspapers to make sure that their misdeeds went unreported.

Corruption of newspapers and television news is necessary to allow the structural defects in the economic system to go unreported and unresolved. This means that a lot of other huge abuses are necessarily ignored. Newspapers and television news had to be neutered of all their investigative journalism reporting capability. This prevents them from exposing this huge structural flaw in the economy. It also means they can't report other abuses.

Don't you consider it suspicious that newspapers and television don't report The Compound Interest Paradox {1} and The Discounted Cashflow Paradox {2}? Isn't it very suspicious these topics are never mentioned in schools? These are two very simple ideas. If I was running a major newspaper or television station, I'd be complaining about these two topics as often as possible.

There are occasional times when newspapers will do a good job of critically covering an issue. However, it almost always is something superficial compared to the other abuses that occur. For example, some people say that John F Kennedy was killed for standing up to the international banking cartel and the Federal Reserve. The investigations following the assassination focused on "How he was killed?" People never ask "Why was he killed?" With Nixon as President, newspapers did a good job of exposing a scandal and holding someone accountable. This distracted all attention from the JFK assassination. See, the government is incapable of covering up secrets! Was the Watergate scandal just a subterfuge to make people think the government couldn't keep secrets effectively? Was it a subterfuge to make people think that newspapers and television news hadn't totally betrayed them?

The Federal Reserve was created to corrupt the monetary system in the US. The easiest way to destroy a country is devaluing its money. Trade surpluses were converted into deficits, and gold left the US treasury for other countries. The income tax was needed to discourage productive work and drain the productive value of the economy. The income tax was needed to force people to use worthless dollars. The income tax was needed to convert all US citizens into slaves instead of free people.

In the election of 1912, there were three major candidates: Roosevelt, Taft, and Wilson. Each of them were the advocates of a banking reform bill. All three versions of the bill had practically the same language. The international bankers were financing all three candidates! Wilson won the election and the Federal Reserve was created. It was passed just before Christmas when a lot of members of Congress had already left for vacation.

The Federal Reserve was an easy sell to the big US banks. By fixing prices, they would be able to sell all the loans they wanted. They knew in advance when interest rates would be lowered or raised, enabling them to profit from the boom/bust cycles. The small banks didn't have inside information. Many small banks were wiped out.

The income tax was an easy sell to politicians. It would enable them to greatly increase the size of the government and their own power. The welfare system was created to compensate for the damage caused by the Federal Reserve and the income tax.

In 1913, the international banking cartel won its final victory over the United States. The Federal Reserve Act and the 16th amendment are the functional equivalent of a surrender treaty. The Federal Reserve Act surrendered control of the monetary system to the international banking cartel and guaranteed the eventual abandonment of the gold standard. The Federal Reserve's debt-based money guaranteed the enslavement of every American under a crushing debt burden. The Federal Reserve guaranteed the ability of the international banking cartel to confiscate wealth through artificially created boom/bust cycles. The income tax converted all US citizens into government slaves, forcing them to turn over forty to fifty percent or more of their wealth via income taxes. The government is now able to steal an additional five to 45 percent through regulations. If you add up the cost of taxation and regulation, the average person has an effective taxation rate of fifty to ninety percent.

Every country everywhere has a corrupt financial system. Every country has a central bank monopoly that fixes interest rates. Every country has an income tax or equivalent tax. (The VAT system used in Europe is logically equivalent to an income tax.) An individual can't say "I'll move to a country with a fair monetary and taxation system", because there aren't any. The USA was a temporary anomaly. For a brief time, it had a fair monetary system and taxation system.

The USA still is the world's most powerful country. Its rules for commerce are still more favorable than other countries, despite the huge handicap of an unfair monetary system and an unfair taxation system. You would think that at some point, somewhere, a country would return to a fair financial and taxation system. Such a country would be incredibly prosperous. However, it would be promptly invaded or infiltrated by the existing countries. Is there any solution?




Bill Totten


  • Home businesses in Europe who are wise do not use banks at all! Simple, Middle Ages solution as before the Rothchilds made their financial empire.

    By Blogger suzannedk, at 4:16 PM, April 19, 2010  

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