A simple, yet powerful one-day step you can take to promote peace, the Constitution, and Ron Paul…without spending a dime.


Be a Part of History


Freedom, you really have to love it. Because of freedom I have the right to ask for your help in saving this country. I also have the right to tell you about an old religious practice that needs to be taken off the shelf, dusted off and used to our benefit – even if you aren’t religious or spiritually minded.


The week of July 1st – July 8th, you can be a part of history in a powerful and easy way. It won’t cost you a dime. In fact, it will save you the cost of two meals.


I am suggesting a national week of fasting and prayer. What better time to do it than near the 4th of July?


In the course of my life, I have seen very real miracles through prayer and fasting. No matter what religious faith you happen to believe in – or what set of beliefs you have – fasting for freedom can be a powerful way to show your commitment to the cause of freedom. If you have faith in God, it can be a powerful way to tap into that power. If you don’t believe in God, going without food and drink and focusing your energy on saving freedom can be a great way to channel the power within yourself. I have seen people’s lives changed through this very real – and mostly untapped – power.


I thought I was alone in my idea to fast for freedom. Then, something really awesome happened. I opened up my email this morning, June 25, 2007, Monday. I opened an email from Bob Schulz from the We the People foundation. In it I read, “…and so I will be having a day of prayer and fasting that our judges will uphold the Constitution.” I thought, “Oh this is perfect timing! It is not a coincidence that this idea has been coming to me.” Go to http://www.wethepeoplefoundation.org/UPDATE/Update2007-06-24.htm

to read Bob Shulz’s message.




You may fast for these individuals if you like, for freedom in general, or for Ron Paul’s campaign. Whatever you decide to fast for you will be tapping into an incredible power.


Fasting for Freedom is So Easy


You only really need to do three things:


  1. Choose one day between Sunday, July 1st and Sunday, July 8th that is convenient for you. Go without food and drink for 2 meals or 24 hours (Obviously certain people with medical conditions or who are nursing or pregnant should not go this long without food and drink).


  1. During that period of hunger and thirst, focus all your energy and prayers on your desired outcome. The positive faith and energy your body can add to the freedom movement is more than you know.


  1. One suggestion I got was for you to set aside the money you would have spent on those two meals – and give it to your favorite charity or freedom organization – or just send it in to Ron Paul’s campaign. Even $5 or $10 can make a huge difference in this great cause for freedom if enough people do it (Proof to this is the fact that some estimates bring total Ron Paul contributions to date to $4 or $5 million). http://www.freemarketnews.com/WorldNews.asp?nid=43192&fb=1


You will see the freedom movement explode and catapult itself into the national agenda.


I sincerely believe all the blessings mentioned below can be yours, plus even more:


  • Your personal health will increase. Science has proven that going without food and drink for short periods from time to time is great for your health; in other words you will feel better, have more energy, and be happier.


  • You will know that you are doing your part to make America free and bring back freedom to this land.


  • America will be blessed because of your fast – the sacrifice and faith you give will be magnified 100 fold.


  • A liberty renaissance will begin and you will be able to look back and know your prayers and fasting were answered.


You can become a force that will not be stopped. You are the soul of this country and you demand to live in a free country. No power or force can quench the human thirst for freedom. No government can trample the fire in the heart of a people that desire to be free.


So be a part of history. Fast and pray one day between July 1st and July 8th. In this simple way, you will take us one step closer to bringing freedom back in America. You will call on the powers of Heaven to do something that only our Creator can do – miracles.



Adam Chavez

Free America, Inc.



An Also-Ran in the GOP Polls, Ron Paul Is Huge on the Web
By Jose Antonio Vargas
Washington Post Staff Writer
Saturday, June 16, 2007; A01

On Technorati, which offers a real-time glimpse of the blogosphere, the most frequently searched term this week was “YouTube.”

Then comes “Ron Paul.”

The presence of the obscure Republican congressman from Texas on a list that includes terms such as “Sopranos,” “Paris Hilton” and “iPhone” is a sign of the online buzz building around the long-shot Republican presidential hopeful — even as mainstream political pundits have written him off.

Rep. Ron Paul is more popular on Facebook than Sen. John McCain (R-Ariz.). He’s got more friends on MySpace than former Massachusetts governor Mitt Romney. His MeetUp groups, with 11,924 members in 279 cities, are the biggest in the Republican field. And his official YouTube videos, including clips of his three debate appearances, have been viewed nearly 1.1 million times — more than those of any other candidate, Republican or Democrat, except Sen. Barack Obama (D-Ill.).

No one’s more surprised at this robust Web presence than Paul himself, a self-described “old-school,” “pen-and-paper guy” who’s serving his 10th congressional term and was the Libertarian Party’s nominee for president in 1988.

“To tell you the truth, I hadn’t heard about this YouTube and all the other Internet sites until supporters started gathering in them,” confessed Paul, 71, who said that he’s raised about $100,000 after each of the three debates. Not bad considering that his campaign had less than $10,000 when his exploratory committee was formed in mid-February. “I tell you I’ve never raised money as efficiently as that, in all my years in Congress, and all I’m doing is speaking my mind.”

That means saying again and again that the Republican Party, especially when it comes to government spending and foreign policy, is in “shambles.”

But while many Democrats have welcomed the young and fresh-faced Obama, who’s trailing Sen. Hillary Rodham Clinton (D-N.Y.) in most public opinion polls, Paul is barely making a dent in the Republican polls.

Republican strategists point out that libertarians, who make up a small but vocal portion of the Republican base, intrinsically gravitate toward the Web’s anything-goes, leave-me-alone nature. They also say that his Web presence proves that the Internet can be a great equalizer in the race, giving a much-needed boost to a fringe candidate with little money and only a shadow of the campaign staffs marshaled by Romney, McCain and former New York mayor Rudolph W. Giuliani.

An obstetrician and gynecologist, Paul is known as “Dr. No” in the House of Representatives. No to big government. No to the Internal Revenue Service. No to the federal ban on same-sex marriage.

“I’m for the individual,” Paul said. “I’m not for the government.”

If he had his way, the Department of Homeland Security and the Department of Education, among other agencies, would not exist. In his view, the USA Patriot Act, which allows the government to search personal data, including private Internet use, is unconstitutional, and trade deals such as the North American Free Trade Agreement are a threat to American independence.

But perhaps what most notably separates Paul from the crowded Republican field, headed by what former Virginia governor James S. Gilmore III calls “Rudy McRomney,” is his stance on the Iraq war. He’s been against it from the very beginning.

After the second Republican presidential debate last month, when Paul implied that American foreign policy has contributed to anti-Americanism in the Middle East — “They attack us because we’re over there. We’ve been bombing Iraq for 10 years,” Paul said — he was attacked by Giuliani, and conservatives such as Saul Anuzis were livid. Anuzis, chairman of the Michigan GOP, threatened to circulate a petition to bar Paul from future Republican presidential debates. Though the petition never materialized, Anuzis’s BlackBerry was flooded with e-mails and his office was inundated with calls for several days. “It was a distraction, no doubt,” he said.

The culprits: Paul’s growing number of supporters, some of whom posted Anuzis’s e-mail address and office phone number on their blogs.

“At first I was skeptical of his increasing online presence, thinking that it’s probably just a small cadre of dedicated Ron Paul fans,” said Matt Lewis, a blogger and director of operations at Townhall, a popular conservative site. “But if you think about it, the number one issue in the country today is Iraq. If you’re a conservative who supports the president’s war, you have nine candidates to choose from. But if you’re a conservative who believes that going into Iraq was a mistake, Ron Paul is the only game in town.”

Added Terry Jeffrey, the syndicated newspaper columnist who ran Patrick J. Buchanan’s failed White House bid in 1996: “On domestic issues like spending and taxation and the role of government, Ron Paul is saying exactly what traditional conservatives have historically thought, and he’s pointing out that the Bush administration has walked away from these principles. That’s a very attractive argument.”

Especially to someone such as Brad Porter, who obsessively writes about Paul on his blog, subscribes to Paul’s YouTube channel and attended a Ron Paul MeetUp event in Pittsburgh last week.

The 28-year-old Carnegie Mellon student donated $50 to Paul’s coffers after the first debate, and an additional $50 after the third debate.

“For a poor college student, that’s a lot,” said Porter, a lifelong Republican. “But I’m not supporting him because I think he could get the nomination. I’m supporting him because I think he can influence the national conversation about what the role of government is, how much power should government have over our lives, how much liberty should we give up for security. These are important issues, and frankly, no one’s thinking about them as seriously and sincerely as Ron Paul.”



Joseph Farah, founder of WorldNetDaily, a popular political website, wrote an article attacking Ron Paul’s views on defense and immigration. Either he had not done his homework, or he was intentionally skewing the facts. Joseph was wrong. Here is a letter I sent to him at jfarah@worldnetdaily.com on June 18, 2007. Feel free to send your own letters to Joseph to tell him why he is wrong. At the end of this article is a link to the original article he wrote.

First, I’d like to make it clear that I love America, always have. I was raised on patriotic songs and feel a rush of pride and happiness when I see the flag or sing the national anthem. I love the country.

I do not however, love the government. I feel that it has been run by self-interested, power-hungry elites for over 100 years. Whenever I criticize the US Government, I am not criticizing America or her people. I believe we as a people have a wonderful moral heritage and a selfless, giving culture. I strongly support Ron Paul as President because I feel that he is really one of us. He is looking out for the people, for our liberties and our freedoms.

First, on immigration.

You said, “In the most recent debate, he implied amnesty wouldn’t be such a bad idea if we could stop attracting illegal aliens with welfare-state programs.”

Joseph, come on sir. I think you of all people know that Ron Paul is completely against rewarding law breakers with amnesty. Ron Paul was explaining that part of the immigration problem is that government entitlement programs are made available to illegals. Like an ant loves sugar, illegals love freebies and thus our current policy attracts illegal immigration.

The following are statements Dr. Paul has made in the U.S. House of Representatives regarding the current immigration debate:

—  “The much-vaunted Senate “compromise” on immigration is a compromise alright:  a compromise of our laws, a compromise of our sovereignty, and a compromise of the Second Amendment.  That anyone in Washington believes this is a credible approach to solving our immigration crisis suggests just how out of touch our political elites really are.”

—  “If we reward millions who came here illegally, surely millions more will follow suit.  Ten years from now we will be in the same position, with a whole new generation of lawbreakers seeking amnesty.”

—  “…real national security cannot be achieved unless and until our borders are physically secured.  It’s as simple as that.  All the talk about fighting terror and making America safer is meaningless without border security.  It makes no sense to seek terrorists abroad if our own front door is left unlocked.”

Second, on the Middle East

It is good that you have studied the Middle East for 30 years. Such a vast subject requires a thorough study in order to be fully understood.

As such, I am sure that you understand how people in the Middle East hold grudges for centuries – no exaggeration, and that the current conflict did not begin when our soldiers put boots down in Saudi Arabia, but rather during the period known as the Crusades. In the early 1800’s, Thomas Jefferson entered that thousand year war on the side of Europe – unfortunately not following his own doctrine of ‘staying out of European wars.’ (Interesting side note: That’s where the Marine song that has the words, “to the shores of Tripoli” comes from) Ever since that time, we have been entangled in the complicated mess that Ronald Reagan would come to call “irrationality.” I will say, however, that the US Government having bases in the holy land of Saudi Arabia has to put it mildly – ticked them off. It has added fuel to a thousand year fire.

I am sure that you understand that there are two types of Jihad’s, defensive Jihads and offensive Jihads (The current Jihad, if you study what our enemy says closely, is a defensive Jihad). They fear that their lands are being taken over by what they think of as “infidels.” Even rabbits will fight if they feel cornered and threatened. People in the Middle East see the current conflict as one more chapter of the Crusades. For a great book by a free market scholar on this subject, I suggest Richard Maybury’s “Thousand Year War in the Mid-East.” As we wage war on Iraq, we in essence prove Islamic Fundamentalist leaders right. They can see, “See, they have attacked Iraq. They are threatening to attack Iran. Your family is next. Your home is next. Soon they will kill you if you do not stand up and fight.” Joseph, if we are really fighting Al-Qaeda and Osama bin-laden, why aren’t we in Pakistan? That’s where Osama is.

Ron Paul’s idea that he pushed through from the very beginning (right after 9/11) was a bill in which we would pay private, local bounty hunters to take Osama bin Laden and capture him. His was a focused plan, one where we go after terrorist leaders one by one; simultaneously pulling our troops out of their holy lands – in essence following in Ronald Reagan’s footsteps.

I do not expect you to agree with me, but I find it disheartening that you will not help in the great cause to elect an honest man in 2008. Please reconsider.Original Joseph Farah article source:


The personal income tax. If only people understood how little of our infrastructure is paid by the Income Tax.

The roads are paid for by the Gasoline Tax.

The schools are paid for by the Property Taxes.

Hospitals are paid for by private individuals.

The government and business leaders put up smokescreens, “US Bond Sales are up” TRANSLATION – The Government is printing a lot more money than usual in order to finance the government…. or “China is investing more heavily in US Treasuries.” TRANSLATION – The Government is borrowing money from China to finance its operations.

I submit that the personal income tax is simply a convenient way to control the people…it is a part of the Socialist systems of Russia and China, and does not belong here.

We did find from 1776-1913 before the personal income tax.

I love America and I am very patriotic, but I do not love what our government has become….it is getting worse sadly. And many people who are sincere and good simply do not realize that they are being played like a fiddle by the big government /  big business propaganda machine.

We are not free under this system.

The founders taught that freedom meant three things.

1. Right to life
2. Right to property
3. Right to liberty

The way IRS operates they can legally seize property from you.

I could go on and on but I think I’ll stop there.

To see an awesome movie about this go to http://www.freedomtofascism.com

or go to google video and search for “Freedom to Fascism Aaron Russo.”

Ron Paul for President 2008

10. Make searchronpaul.com your homepage. Half of the proceeds of all the google money they get goes to Ron Paul’s campaign.

9.  Buy a cheap bumper sticker. They only cost $2 – $5. There are hundreds of thousands of us supporting Dr. Paul. If each of us had a bumper sticker imagine the impact that would make. You can buy bumper stickers at one of these two links:



8. Go to ronpaul.meetup.com and start meeting with other supporters in  your area.

7. Call your local talk show and get some REAL discussion going on about Dr. Paul and his stances on freedom.

6. Pray. Pray. Pray. This is going to take a miracle but our history is full of miracles. We defeated the most powerful empire in the world back in the late 1700’s, remember?

5. Donate $5 a month. Again, if 100,000 of us donate just a few dollars a month, that’s $500,000 a month. Do not think that your contribution can’t help. It can.

4. Register as a Republican today so that your vote will count in the primaries.

3. Do not get discouraged. No effort is wasted. If nothing else you will be blessed for standing up for truth.

2. Sign up for Ron Paul’s YouTube Channel by going to this link


and then hitting SUBSCRIBE.

1. Email the campagin at mail@ronpaul2008.com and offer them help.

An Essay on the Federal Reserve

Paul Warburg, better known to all of us as “Daddy Warbucks” as he was portrayed in the movie and comic strip called Annie will be remembered by careful students of history as the father of a revolution. His admiring biographer had this to say, “Paul M. Warburg is probably the mildest-mannered man that ever personally conducted a revolution. It was a bloodless revolution: he did not attempt to rouse the populace to arms. He stepped forth armed simply with an idea. And he conquered. That’s the amazing thing. A shy, sensitive man, he imposed his idea on a nation of a hundred million people.”1

In order to understand the power that bankers like Warburg had even before the “silent, bloodless revolution.” (which took place in 1913 when the Federal Reserve Act was passed), a short history lesson is needed. This will also help us to understand what the Federal Reserve is. It will also help to answer a question which is rarely asked. Why are bankers so rich? Do they possess some ability that the rest of us do not. Why are their buildings always the largest and most expensive in any great city?


By 1910, the practice of printing paper money and accepting it as if it were money had been institutionalized in the United States. At this time gold still backed the money but only partially. This concept is known as fractional reserve banking. In other words, the bank only has a fraction of your gold on hand at any given time. They claim to be able to pay you in full “on demand” but they also claim to be able to pay every other depositor in full “on demand.” At the same time they have lent out a fraction of your money at interest. Thus the term fractional-reserve banking.

In the United States of America, gold and silver had always been the legal money as set forth in the beginning with the Constitution. In time, people got used to the receipt or the paper instead of the gold or silver (fiat money had been banned completely because the Founding Fathers had just passed through a horrible situation with runaway inflation when they met to pound out the Constitution). The bankers found loopholes around this ban of fiat money and would claim that their notes were 100% redeemable with real money but their receipt money would be devalued by printing more of it than there was gold and silver to back it up. Finally, we have forgotten about the gold and silver and believe that the paper is the money. 2

In other words, if you were a banker today you could print up money, loan it out and then collect interest on it. Essentially as a banker you make something out of nothing. It is no wonder that the banking buildings are always the largest on the horizon of any city – bankers can make money out of nothing. A more thorough explanation is necessary.

Traditionally, paper “notes” or what we think of as money were receipts given to those who had stored their gold for safekeeping with the goldsmith. In time, people began exchanging the paper itself for goods and services. Let us say that you had stored 10 ounces of gold with the local goldsmith. He gave you a “note” that said you had on storage 10 ounces of gold which you could pick up at any time. When you went to market one day you thought, “Hey why don’t I just give the clerk at the clothing shop my receipt and let him fetch my gold from the vault later?” This was easier and more convenient. Time passed and this became the norm. Paper began to be exchanged instead of gold.

Observant goldsmiths soon realized a simple truth: at any given time 85% of the gold is in the vaults! “Why don’t I loan out some of these people’s gold and collect interest on the loan?” these pragmatic goldsmiths thought. “The fact that it is not my money will not hurt anybody because they won’t be able to tell the difference between my gold and other people’s gold.” By lending out gold that was not his and by simply printing up more notes than could actually be backed up by real money, the banker would “inflate” the money supply. Thus was born inflation or more properly put, theft. This was (and is) the reason for bank failures.

A bank failure is when the public gets tipped off to the fact that the notes they are holding may be unredeemable and it is time to pick up their real money – the gold. Time and time again, people stormed the banks, demanding that their gold be paid in full. If everybody did this, the bank was forced into bankruptcy and the only people who were paid were the “early-birds.” Everybody else was out of luck. It seems that a natural consequence of this fraud should have been the justice of the court throwing these fraudulent bankers in jail. Instead, our Congress went down the slippery slope early on of bailing out the bankers. This is now institutionalized in what is called the Federal Reserve System.

A story illustrates the process, “Let us suppose that we are playing a game of poker at the home of Charlie Smith. Each of us has given $20 to Charlie who, acting as banker, has put our money into a shoe box and given us, in return, twenty poker chips. It is the understanding that, anytime we want to go home, we can get back a dollar for each chip we have at that time. Now let us suppose that Charlie’s brother-in-law, Larry, shows up, not to play poker, but to borrow money. Since six of us are playing and each has put in $20, there is a total of $120 in the shoe box, and that turns out to be perfect for Larry’s needs. You can imagine what would happen if Charlie decided to lend out the “idle” money. It is not available for lending…Those dollars no longer even exist as money. They have been replaced – in concept at least – by the poker chips.”3

So banking as we know it was born. The local goldsmith became the local banker. Soon these bankers became very powerful because of their almost magical ability to “create” money simply by printing a few more receipts. The Federal Reserve took this one more step by institutionalizing the game and choosing the players.

The Birth of the Federal Reserve

Place: New Jersey railway station en route to Jekyll Island. 1910.


  1. Nelson W. Aldrich, Republican “whip” in the Senate, Chairman of the National Monetary Commission, business associate of J.P. Morgan, father in law to John D. Rockefeller, Jr. ;

  2. Abraham Piatt Andrew, Assistant Secretary of the US Treasury;

  3. Frank A. Vanderlip, President of the National City Bank of New York, the most powerful of the banks at that time, representing William Rockefeller and the international investment banking house of Kuhn, Loeb & Company ;

  4. Henry P. Davison, senior partner of the J.P. Morgan Company ;

  5. Charles D. Norton, President of J.P. Morgan’s First National Bank of New York ;

  6. Benjamin Strong, head of J.P. Morgan’s Bankers Trust Company ;

  7. Paul M. Warburg, a partner in Kuhn, Loeb, & Company, a representative of the Rothschild banking dynasty in England and France, and brother to Max Warburg who was head of the Warburg banking consortium in Germany and the Netherlands.

Purpose: This is the point of contention among historians. Over the years, however, those present have told the story. Through various articles and through the memoirs of the members themselves, we now have a very cohesive story about exactly what took place at Jekyll Island.

The Story:

A group of the most powerful bankers in the United States (and arguably the world) met together in secret to draft the plan that would become the Federal Reserve Act. At this time there was a growing political movement demanding banking reform because of the many crashes that the nation’s banks had experienced. The cause of these crashes was simple: bankers were lending out money that did not belong to them and when too many of the original depositors came to collect their money the bank had to shut its doors. There is a simple solution this problem: make it illegal for banks to lend out money unless it is money that they have collected in the form of bank fees or through other honest means, then throw in jail any banker who lends out money from his depositors’ reserves. This would obviously make banking much less lucrative. This kind of real reform would also force banking to be solvent and we would have avoided all banking crashes including the crash of 1907 which led to the public demonstrations for banking reform. If and when banking institutions crashed, their owners would be thrown in jail and the problem could be rooted out.

Griffin explains, “The proper solution to this problem is to require the banks, like all other businesses, to honor their contracts. If they tell their customers that deposits are “payable upon demand,” then they should hold enough cash to make good on that promise, regardless of when the customers want it or how many of them want it. In other words, they should keep cash in the vault equal to 100% of their depositors’ accounts. When we give our hat to the hat-check girl and obtain a receipt for it, we don’t expect her to rent it out while we eat dinner hoping she’ll get it back – or one just like it – in time for our departure. We expect all the hats to remain there all the time so there will be no question of getting ours back precisely when we want it.”4

This is not what happened. A simple glance at the roster of those who proposed the Federal Reserve Act will tell a man being guided by common sense that there was a conflict of interest there. A great example of this is modern day campaign finance reform. We expect the very politicians who are elected by the corrupt system to propose solutions that will make the system less corrupt. That is like trying to get a defense contractor to oppose a war.

In 1916, a young no-name called B.C. Forbes (whose name would later become synonymous with credible financial news) had this to say about the meeting at Jekyll Island in Leslie’s Weekly.

Picture a party of the nation’s greatest bankers stealing out of New York on a private railroad car under cover of darkness, stealthily hieing hundreds of miles South, embarking on a mysterious launch, sneaking on to an island deserted by all but a few servants, living there a full week under such rigid secrecy that the names of not one of them was once mentioned lest the servants learn the identity and disclose to the world this strangest, most secret expedition in the history of American finance.

I am not romancing. I am giving to the world, for the first time, the real story of how the famous Aldrich currency report, the foundation of our new currency system, was written.”5

What happened next? The plan was drafted. In the February 9, 1935 edition of the Saturday Evening Post, the the words of one of the Jekyll Island 7, Frank Vanderlip tell us what the Jekyll Island meeting was about,

“Despite my views about the value to society of greater publicity for the affairs of corporations, there was an occasion, near the close of 1910, when I was as secretive – indeed, as furtive – as any conspirator…. I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System”6

Now we know that the plan was indeed crafted at Jekyll Island. What was the plan? Why the secrecy? What was it they did not want the public to know about?


There were basically three problems that these bankers were trying to solve. They were the who’s who of banking in New York City. Their banking institutions had been established for many years, in some cases going back to the 1600’s in England through their family history. They had been taught the art of fractional reserve banking and were able to loan out more money than actually existed (in gold deposits) simply by printing up more notes. As competition from outside the banking world and inside the banking world threatened to curtail their power, they went to work to craft a plan to cement their power and institutionalize their ability to print money without any backing.

The public was taught that the Federal Reserve Act was an act devised by Congress for the benefit of the public. The secrecy involved was necessary for the act to pass. If the people had known that the most powerful bankers of New York were drafting a plan for banking reform, they would have reacted logically – by opposing the act. To borrow our former analogy, this is not dissimilar to political leaders having a vested interest in and financial ties with defense contractors. It is possible that they would act wisely and not let their pocket books rule their ideology, but the temptation is great to pull a few strings and create more wealth for themselves, whatever the cost to the public.

Back to our three problems. Note that these were the actual problems as opposed to the problems that were sold to the public. The problems that were sold to the public are summed up quite nicely in one of the most widely used textbooks on this subject, “It sprang from 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.”7 Now to the real story.

    Problem #1. The problem of competition from other banks.

G. Edward Griffin, a well known historian, documentary maker, lecturer and writer is listed in Who’s Who in America. He has written on such diverse topics as archeology, ancient earth history, terrorism, international banking, the history of taxation, U.S. Foreign policy, and the Supreme Court among a myriad of other things. He is also a Certified Financial Planner and a recipient of the coveted Telly Award. In his book, The Creature from Jekyll Island, he had this to say:

“In 1910, the number of banks in the United States was growing at a phenomenal rate. In fact, it had more than doubled to over twenty thousand in just the previous ten years. Furthermore, most of them were springing up in the South and West, causing the New York banks to suffer a steady decline of market share… By 1913, when the Federal Reserve Act was passed, those numbers were seventy-one per cent non-national banks holding fifty-seven per cent of the deposits. In the eyes of those [big bankers] from New York, this was a trend that simply had to be reversed.”

We can see where this trend was headed. With the expansion of commerce and industry in the western United States and in the South, these bankers would have to compete with other bankers. This would mean less profits. After the passage of the Federal Reserve Act, this problem was solved. Senator Aldrich, in July 1914, said the following in an article published in The Independent, “Before the passage of this Act, the New York bankers could only dominate the reserves of New York. Now we are able to dominate the bank reserves of the entire country.”

    Problem #2 Internal Funding (Business Independent of Bankers)

Griffin continues, “…between 1900 and 1910, seventy per cent of the funding for American corporate growth was generated internally, making industry increasingly independent of the banks. Even the federal government was becoming thrifty. It had a growing stockpile of gold, was systematically redeeming the Greenbacks – which had been issued during the Civil War – and was rapidly reducing the national debt. Here was another trend that had to be halted.”8

Independence from banks? No way! They would not have that. Their greatest source of income was collected when people (or governments) were in debt to them. Without this perpetual debt to banks, their power would have shrunk and they would have become much less important. They probably would not have disappeared completely but would have had much less influence over business, industry, and government. An ancient proverb says “The debtor is slave to the creditor.” The banks literally were in a fight for their own survival as the great creditor to American business and government. If 70% of funding for business was being generated internally, that was 70% that the banks were missing out on in terms of profits. Since this number had been steadily growing the future of banks being the lender to new business and governments looked bleak.

    Problem #3 A Run on the Bank – A Banker’s Worst Nightmare

Griffin continues his analysis, “The greatest threat, however, came not from rivals or private capital formation, but from the public at large in the form of what bankers call a run on the bank.”

The underlying problem here is that banks accept approximately $1 in savings for every $9 they loan to the public. If for some reason the public becomes nervous about having their money in a particular bank and they begin withdrawing their money too quickly, the bank is sure to go bankrupt.

Griffin explains, “It was dangerous enough to loan ninety per cent of their customers’ savings (keeping only one dollar in reserve out of every ten), but that had proven to be adequate most of the time. Some banks, however, were tempted to walk even closer to the precipice. They pushed the ratio to ninety-two per cent, ninety-five per cent, ninety-nine percent.”

And so it went. Banks behaved badly by loaning out more money than they could afford. It is one thing to loan out 85% of what you have on hand. In most cases you will be safe from a run on the bank. For each per cent that you loan out above that, your odds of having too many “withdrawers” on any give day increase, thus raising your risk for a run on the bank. Therefore, the banks that were failing were the banks that were the biggest risk takers.

So now we have the background for our story. This tiny group of powerful men had three main problems to solve:

  1. Stop the influence of smaller banks to insure their own control.

  2. Stop the rising trend of businesses borrowing money from sources other than banks.

  3. Avoid run on the banks while still being able to loan out money that belonged to their depositors (How to on the one hand have their “99% of the money is loaned out” cake and on the other hand eat it too – i.e.not have a run on the bank)

The Story:

The first decision made by the Jekyll Island 7 was to adopt the central banking system. This was the model which had been used in Europe. This would be one of the public relations challenges for this team of plan-drafters. Most Americans were opposed to an increase in central power of any kind so what we would call a political spin had to be given to this piece of work called the Federal Reserve System. Even the wording was spun in this PR campaign. The word “bank” was replaced with system. The word “central” was replaced by the term “Federal Reserve.” Federal made people immediately think of the government and reserve made people feel secure. The truth was that this system would not be federal, but privately owned as in the European central banks; and it would hold no reserves because the money printed by the Federal Reserve would not be backed by gold or silver but by the ‘full faith and credit of the United States’ aka the taxpayer.

In the official biography of Nelson Aldrich, Nathaniel Wright Stephenson writes, “Aldrich entered this discussion at Jekyll Island an ardent convert to the idea of a central bank. His desire was to transplant the system of one of the great European banks, say the Bank of England, bodily to America.”9 His task would eventually be to sell this idea to Congress. He knew opposition would be too strong to allow a central bank. Therefore, according to John Kenneth Galbraith, “It was his [Aldrich’s] thought to outflank the opposition by having not one central bank but many. And the word bank would itself be avoided.”10

Eliminating Competition and Forming a Union

Senator Aldrich of the Jekyll Island 7 had this to say to the American Bankers Association in 1912, “The organization proposed is not a bank, but a cooperative union of all the banks of the country for definite purposes.” The Federal Reserve was to be a cooperative or a union of all the banks. To understand what this means, think of Walmart and Target getting together and proposing a “cooperative of stores.” What would this mean for their collective competition? Before this they struggled against each other for market share, both attempting to outdo the other. After a “cooperative union,” they would no longer fight each other, but would now fight everybody else together. The example does not fit exactly in every way but it does show what a cooperative means for the market. Those who are in the cooperative are taken care of and everybody else is out of luck.

Two years later in 1914, A. Barton Hepburn of Chase National Bank said to another meeting of the American Bankers Association, “The measure recognizes and adopts the principles of a central bank. Indeed, if it works out as the sponsors of the law hope, it will make all incorporated banks together joint owners of a central dominating power.”11

And so it went. The union was formed. We now have a Central Bank, or a “central dominating power” of banking elites, as Hepburn put it. Proponents of the Federal Reserve System have argued that the system has stabilized our monetary policy by placing those important financial decisions in the hands of the experts instead of “dependent on the amount of gold which has been mined out of the earth that year.”

Let us examine those two arguments.

#1 The Federal Reserve has not stabilized our economy.

Let us take a look at the track record of the Federal Reserve System in stabilizing our economy. Griffin sums up the track record of the Fed, “Since its inception it has presided over the crashes of 1921 and 1929; the Great Depression of ’29 to ’39; recessions in ’53, ’57, ’69, ’75, and ’81; a stock market “Black Monday” in ’87; and a 1000% inflation which has destroyed 90% of the dollar’s purchasing power….there is no doubt that those who run it are motivated to maintain full employment, high productivity, low inflation, and a generally sound economy. They are not interested in killing the goose that lays such beautiful golden eggs. But, when there is a conflict between the public interest and the private needs of the [cooperative union] – a conflict that arises almost daily – the public will be sacrificed. That is the nature of the beast. It is foolish to expect a [cooperative union] to act in any other way.”12

While it is true that our economy can go through periods of stability and prosperity under the Federal Reserve System, this was also true of our country before 1913. Anything that has the power to stabilize something from a position of central power also has the power to destabilize. It is not the author’s intent to prove that the financial upheavals over which it presided were done on purpose, but the fact that this kind of power is now held in the hands of so few should be alarming. The fact is, the Fed decides how much your mortgage payment is, how much your car payment is, and whether you have a job. With the simple flip of a switch, the Chairman of the Fed can send us into a depression. A simple explanation will not suffice to cover and explain all aspects of this but an attempt will be made to shed light on this important part of the Federal Reserve.

Hold on to your seat because this can get confusing. The “discount rate” is a fancy term for the interest rate at which the Federal Reserve Bank loans money to the US Treasury (money loaned to the Treasury is then spent by Congress). After the Treasury spends the money through Congress it is deposited into commercial banks. Once this money is deposited into those commercial banks, the commercial banks can then loan out $9 for every $1 they have on deposit. In other words, when the Fed flips their switch to create money, the retail or commercial banks are then given the right to make new loans (which translates into more money being sent into the economy). For a commercial bank, the only way you make money is if you lend money. Thus the commercial bankers are always anxious to see what the Fed is going to do.

The Fed is responsible for exactly how much money will be in the economy. If say, the Discount Rate is set at 5% then X amount of money will be poured into the economy. If the rate is 30%, Y, and if the rate gets too high no money will be put into circulation. Without going into a detailed analysis of this process (which would take an entire paper to explain) let us just say that if the Fed sets the Discount Rate to certain levels the economy will stop growing and will begin shrinking. The shrinking is caused by “money” becoming more scarce. Since all of our money is created by the Federal Reserve in the form of Federal Reserve Notes, all of our money can be taken back. This kind of power leaves all of us completely dependent on the whims of the Fed. As mentioned above, generally speaking they will not attack the “goose that is laying their golden eggs.” However, sometimes it is to their advantage to act against the best interests of the public.

With the power to print money out of nothing at their fingertips, the operators of the Fed have a temptation that would be hard to fight. This power translates into a hidden tax called inflation. Let’s say that you are behind the reins of the United States government. War has just been declared against terrorism. You have two options to fund this new war. You can either (a) raise taxes, (b) cut spending in other programs, or (c) print more money. Printing more money is a lot easier and more “politically expedient” to do than the other two options because people don’t notice until it is too late. 18-24 months later the public starts saying, “Dang! Gas sure is getting expensive.” or “Boy, it feels like we have no money left over at the end of the month anymore.”

#2 A Gold Standard Protects the Common Man

Alan Greenspan, former Chairman of the Federal Reserve Board of Governors, had this to say about fiat money or money without a precious metal backing, “The abandonment of the gold standard made it possible to use the banking system as a means to an unlimited expansion of credit…

“The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy’s books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes…

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold…The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

“This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the “hidden” confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”13

This was the pre-Fed Greenspan in 1966. He is explaining basic economics here. Suppose the money supply is $100 and a loaf of bread is $1 and your salary is $1. Now suppose the money supply doubles. Now the money supply is $200. That loaf of bread is eventually going to cost $2 once the laws of supply and demand come into play (the same amount of people are bidding for the same goods and services only now they have twice as much money to bid with). Your salary may take much longer to adjust and may never adjust. Thus the Fed who added the $100 into the economy got to pay for their pet project whether it be war or what have you. Business adjusts. The people, especially the poor, are hit the hardest. Once appointed to be Chairman of the Fed, he became silent on this issue. Once he was in the power seat of those “statists” he refers to, his righteous rant was no longer expedient and he put power and wealth before his own wisdom and knowledge.

Griffin reminds us of the longevity of gold as a store of value, “At the Savoy Hotel in London, one gold sovereign will still buy dinner for three, exactly as it did in 1913. And, in ancient Rome, the cost of a finely made toga, belt, and pair of sandals was one ounce of gold. That is almost exactly the same cost today, two-thousand years later, for a hand-crafted suit, belt, and a pair of dress shoes. There are no central banks or other human institutions which could even come close to providing that kind of price stability. And, yet it is totally automatic under a gold standard.

In any event… we should acknowledge that there is nothing mystical about [gold]. It is merely a commodity which, because it has intrinsic value and possesses certain qualities, has become accepted throughout history as a medium of exchange…It is entirely possible, of course, that something other than gold would be better as the basis for money. It’s just that, in over two thousand years, no one has been able to find it.”


So we stand today. Only one in one thousand understand what the Federal Reserve is and what is allows government to do. When an economic downturn does hit, who do we usually blame? Greedy businesses for charging more? The President for enacting tax cuts for the wealthy or for not balancing the budget? Because our central banking system is at the helm of this economy, when prices go up it is because they injected more dollars into the economy about 18 months ago.

When one looks through these lenses and studies political history since 1913, much becomes clear.

Thomas J. Dilorenzo, an adjunct scholar of the Mises Institute, teaches economics at Loyola College in Maryland. He made some interesting observations in an article written in May 2000, “Like a man who douses a large pile of rags with gasoline and then warns of a fire hazard, Fed Chairman Alan Greenspan has begun issuing dire warnings of impending inflation after orchestrating several years of explosive monetary growth. To some observers this behavior is just the result of the difficulties inherent in central planning. But the real reason for it was explained by Congressman Ron Paul (R-Tex.): The Fed is a political institution that is used to manipulate the economy for the benefit of White House incumbents at the expense of the rest of society….The Fed has almost always been run the way Greenspan is running it-to accommodate the president’s political preferences.

“In an April 1978 article in the Journal of Monetary Economics the late Robert Weintraub showed how the Fed fundamentally shifted its monetary policy course in 1953, 1961, 1969, 1974, and 1977-all years in which the presidency changed hands. For example, Eisenhower wanted slower monetary growth; the money supply grew by 1.73 percent during his first administration, the slowest rate in a decade.

“President Kennedy wanted faster money creation; from January 1961 to November 1963 the money supply grew by 2.31 percent. Lyndon Johnson desired even faster monetary growth to finance the Vietnam war; money supply growth more than doubled during his presidential term to 5.0 percent….

“[In 1972 Richard Nixon] advocated even faster money creation. The growth rate of the money supply in 1972 was the fastest for any one year since the end of World War II and helped assure Nixon’s reelection- and the stagflation that followed.”14

On and on it goes right through the administrations of Reagan, Bush, Clinton and our current Bush. It looks to be getting much worse these days. Instead of slight increases of a few percentage points here and there, estimates show that the money supply doubled from 1995 to 2003. It looks like it may double again shortly. There is no longer any way to know for sure because the M3 (the report of how much money was added to the money supply) is no longer public knowledge.

Hyper-inflation and major loss of wealth across the middle class seem to be right around the corner. In the current Presidential debate, a frank evaluation of the Federal Reserve System should be had. From almost every candidate we get the same old line.

What will happen if the people do not get rid of the Federal Reserve system, which allows a fiat currency to be “legal tender for all debts public and private?” The same thing that has happened to every other fiat currency system. That nation will fall apart.

Griffin comments on the history of what hyperinflation has caused, “Hyperinflation is fertile ground for the seeds of revolution. Economic despair led the masses to grasp at the promises of Lenin in Russia, Hitler in Germany, Mussolini in Italy, and Mao in China.” 15

Will we end up attracted to the promises of a charismatic dictator because of the hyperinflation in the United States that is sure to come? The decision is ours to make but if we do not act to end the Federal Reserve system all economic indicators point to a complete collapse of the US Dollar.

Much of what has propped up the US Dollar since the 70’s was the creation of OPEC, which demanded that all oil transactions throughout the world be conducted in US Dollars. This artificially “backed up” the dollar, giving it a demand that would otherwise not be there.

In 2000, Iraq threatened to change course and switch to doing all their business in Euros instead of dollars. Since then, Iran and Venezuela have followed suit. Is it any wonder that 2 of the three in the “axis of evil” are those who have declared war economically by threatening to cripple the US Dollar.

This is one of the dangers to the US of having a dollar which is not backed by anything. According to the Federal Debt Relief System, “A real dollar is defined as 412.5 grams of 90% silver, and a foot is defined as 12 inches.” I suppose we must decide whether sound weights and sound money will come back. If not we will have to live with the apparent consequences.

1Harold Kellock, “Warburg, the Revolutionist,” The Century Magazine, May 1915, p. 79

2Modern day political scientists have simply shrugged off the Constitutional ban on fiat money as “an outdated document which could not have anticipated our modern state of affairs and the need for an elastic currency.” Not wishing to spend an inordinate amount of time on the issue, let it simply be said that the reason the founders banned fiat money was because of their own experience with its effects. They saw money inflation rise by up to 3000% during the revolution

3Griffin, p. 166

4Griffin, p. 34

5“Men Who Are Making America,” by B.C. Forbes, Leslie’s Weekly, October 19, 1916, p. 423

6“From Farm Boy to Financier,” by Frank A. Vanderlip, The Saturday Evening Post, Feb. 9, 1933, pp. 25, 70

7Paul A. Samuelson, Economics, 8th ed. (New York: McGraw -Hill, 1970), p. 272

8Griffin, p. 25

9Nathaniel Wright Stephenson, Nelson W. Aldrich in American Politics (New York: Scribners, 1930; rpt. New York: Kennikat Press, 1971), p. 373

10John Kenneth Galbraith, Money: Whence It Came, Where It Went (Boston: Houghton Mifflin, 1975), p. 122

11Quoted by Kolko, Triumph, p. 235

12Griffin, p. 20

13Alan Greenspan, “Gold and Economic Freedom,” in Capitalism: The Unknown Ideal, ed. Ayn Rand (New York: Signet Books, 1967), p. 101.

14Thomas J. Dilorenzo, Federal Reserve and Corrupt Political Power, May 2000, Mises Institute Online

15Griffin, p. 546