Not long ago, Treasury Secretary, Henry Paulson was asked by a Chinese student at Beijing University what accounted for the great success of Goldman Sachs. He said that since he was no longer Chairman of the firm, he could not comment on the question. If he had answered honestly he should have stated that the firm�s

�But if you wish to remain slaves of bankers and pay the cost of your own slavery, let them create money� - Joshua Stamp

success and for that matter the success of all the major US investment houses and banks was attributable to the beneficence of the Federal Reserve Board, which is partly owned by his ex-firm. The central bank has provided copious amounts of money and low administered interest rates to keep the great speculative game going; just as it did in the previous Kondratieff autumn between 1921 and 1929.

Joshua Stamp was appointed a director of the Bank of England in 1928. This is what he had to say about central banks-

�Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with a flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes, like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But if you wish to remain slaves of bankers and pay the cost of your own slavery, let them create money.�

Creating money is exactly what the Bank is doing and it is creating money out of nothing. Amschel Mayer Rothschild, the son of Mayer Amschel Rothschild, the founder of the Rothschild dynasty is purported to have said in 1838, �Permit me to control the issue of money of a nation, and I care not who makes the laws.� The family has controlled the issuance of money in Europe since the 1800s and the United States since the founding of the Federal Reserve Board in 1913.

In August 1911, John Moody wrote an article in McClure�s Magazine titled �The Seven Men.� �Seven men in Wall Street now control a great share of the fundamental industry and resources of the United States. Three of the seven men, J. P. Morgan, James J. Hill and George F. Baker, head of the so-called Morgan group; four of them, John D. and William Rockefeller, James Stillman, head of the National City bank, and Jacob H. Schiff of the private banking firm of Kuhn, Loeb Company, to the so-called Standard Oil City Bank group�.the central machine of capital extends its control over the United States. Moody, John, The Seven Men, McClure�s Magazine, August 1911. (The Secrets of the Federal Reserve. P.47).

�What John Moody did not know, or did not tell his readers, was that the most powerful men in the United States were themselves answerable to another power, a foreign power, and a power which had been steadfastly seeking to extend its control over the young republic of the United States since its very inception. This power was the financial power of England centered in the London Branch of the House of Rothschild.

The fact was that in 1910, the United States was for all practical purposes being ruled from England and so it is today. (The Secrets of the Federal Reserve. P. 47-48). The Federal Reserve Board is not a US government institution, but a privately held corporation owned by shareholders, whose names were kept secret under the provision of the Federal Reserve Act. But,

�In our circles it became widely known that the Fed�s principal owners or stockholders as they prefer to be called were the ROTHSCHILD banks of London and Berlin; LAZARD BROTHERS Banks of Paris; ISRAEL MOSES SEIF Bank of Italy; WARBURG Bank of Hamburg and Amsterdam; LEHMAN BROTHERS Bank of New York; and GOLDMAN SACHS Banks of New York; KUHN LOEB Bank of New York; CHASE MANHATTAN (The Rockefellers) Bank of New York. These interests own and operate The Federal Reserve system through approximately three hundred stockholders, all of whom are very well known to each other, and frequently related.� (Russbacher, Gunther, The Short Road to Chaos and Destruction; An Expose of the Federal Reserve System.

�I still can�t get over the whole Federal Reserve racket.�

Consider the following---let�s take a situation where the US government needs money. The US doesn�t just issue United States Notes, which of course it could. These notes would be dollars backed by the full faith and credit of the United States. No, the US doesn�t issue dollars straight out of the Treasury.�

�I still can�t get over the whole Federal Reserve racket�

�This is what the US does--- it issues Treasury bonds. The US then sells those Treasury bonds to the Fed. The Fed buys the bonds. Wait, how does the Fed pay for the bonds? The Fed simply creates money �out of thin air� (book-keeping entry) with which it buys the bonds. The money that the Fed creates from nowhere then goes to the US. The Fed holds the US bonds, and the unbelievable irony is that the US then pays interest on the very bonds that the US itself issued. The mind boggles.�

�The damnable result is that the Fed effectively controls the US money supply. The Fed is just an agency of the US, it�s not even a branch of the US government. The Fed is not mentioned in the constitution of the United States. No constitutional amendment was ever created or voted on to accept the Fed. The constitutionality of the Federal Reserve has never come before the Supreme Court. The fed is a private bank that keeps the US forever in debt-or should I say in increasing debt along with ever rising interest payments.�

�How did the Fed get away with this outrage? A tiny secretive group of bankers sneaked through a bill in 1913 at a time when many in Congress were absent. Those who were there and voted for the bill didn�t realize (as so often happens) what they were voting for. (shades of the shameful 2002 vote to hand President Bush the power to decide on war with Iraq)� (Richards Remarks www.dowtheoryletters.com. March 27, 2007).

After Woodrow Wilson had signed the Federal Reserve Act into law he is purported to have told a friend -

�I am a most unhappy man, I have unwittingly ruined my country. A great industrial nation is now 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.� (The Money Masters Video).

A few days before the Federal Reserve Bill came to the Senate floor for a vote, Senator Henry Cabot Lodge wrote to Senator Weeks outlining his opposition to the Bill.

��..The Bill as it stands seems to me to open the way to a vast inflation currency. �I had hoped to support this Bill, but I can not vote for it as it stands, because it seems to me to contain features and to rest upon principles in the highest degree menacing to our prosperity, to stability in business, and to the general welfare of the people of the United States�. (December 17th, 1913, Quoted by Congressman Lois McFadden in his speech to Congress denouncing the Federal Reserve on June 10th, 1932).

When the Federal Reserve Board wants to inject liquidity into the banks, it buys bonds from the banks and pays for its purchase with money it creates out of nothing. The banks in turn lend out this money and supposedly the economy expands.

This scam has been going on ever since the inception of the Federal Reserve. It was done to fund the great stock market boom of the 1920s. The money creation since 1980 has been unprecedented and this has provided the fuel for the biggest speculative market ever.

The banks have reaped trillions of dollars in interest, while the American people for the most part have been sold into slavery. �The millions of working families of America are now indebted to a few thousand banking families for twice the assessed value of the entire United States. And those banking families obtained that debt against us for the cost of paper, ink and bookkeeping. Emry, Sheldon, (The Real Story of Money Control over America).

President Thomas Jefferson warned,

�If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.�  (Money Masters Video).

Since its inception in 1913, the Federal Reserve Board has been responsible for an almost 95% devaluation of the U.S. dollar. All this has been achieved through its ability to continually inflate the money supply.

The only time when it failed to maintain inflation was from 1930 to 1934, during the onset of the Great depression, even though it tried mightily to do so.

Between 1985 and 2005, the Federal Reserve Board has increased the money supply by five times. This extraordinary money creation is merely the catalyst for debt creation. In a fiat money system, money is debt.

The total debt in the United States today is approaching $50 trillion and that does not take into account the huge amounts required for the federal funding of social security and Medicare.

There is absolutely no way that this money can ever be repaid except by continued inflation. Now that the credit bubble has blown up, inflation is no longer an option; bankruptcy looms.

Notice in the accompanying US debt chart where exactly debt begins to climb vertically. It is about 1982, which just so happens to be the onset of the Kondratieff autumn. Autumn is always the Kondratieff season during which there is massive speculation. This speculation requires monetary fuel to ignite it and keep it going. Excess monetary inflation goes hand in hand with excess debt. 

First five articles in this series by Ian Gordon:

1. THIS IS IT! (Series on Kondratieff Cycle-4)
   
   
2. THE CREDIT CRUNCH (Series on Kondratieff Cycle-4)
   
   
3. "FAR FROM THE MADDING CROWD�S IGNOBLE STRIFE�" (Series on Kondratieff Cycle-4)
   
   
4. HUBRIS AND GREED (Series on Kondratieff Cycle-4)
   
   
5. IN NEW YORK MONEY IS GOD AND GOD IS MONEY. (Series on Kondratieff Cycle-5)

*THE KONDRATIEFF CYCLE

The Kondratief cycle* was first described by Nicholai Kondratief, a Russian Economist early in the 20th century. He discovered a 50-60 year cycle in economic data series of the economies of the United States and other Western industrial nations. He used it to explain the underlying patterns of rises and falls in these economies.

"And important underlying feature of the cycle is a build-up in debt during the up-phase of the cycle, and a destruction of that debt as the economy collapses, in the crash phase at the end of the period, normally considered to be 50-60 years."

- Axis Editors

Spring

• Gradual increase in business activity and employment
• Consumer confidence increases in line with growing economy
• Consumer prices start a gradual increase from very low levels
• Stock prices begin a steady rise and reach a peak at the end of Spring
• Interest rises slowly from historic low levels in line with gradual credit expansion

Summer

•  Summer War � 1st Cycle: War of 1812
  2nd Cycle: US Civil War
  ; 3rd Cycle: Word War I 1914-1918
  4th Cycle: Vietnam War
• Financed by massive increase in money supply leads to large inflation which peaks at the end of Summer
• Gold prices reach significant peak at end of Summer
• Interest rates rise rapidly and peak at end of Summer
• Stock market under pressure and ends Summer with a bear market low

Autumn

• Massive stock bull market financed by fiscal and monetary largesse
• Stock prices reach euphonic peak to signal start of winter
• Inflation and commodity prices fall
• Real Estate prices rise and reach peak at beginning of winter
• Gold and Gold equities in bear market, reach bear market low at Autumn�s end
• Debt reaches astronomical levels by end of Autumn
• Massive consumer confidence due to stock prices, real estate prices and plentiful jobs

Winter

• Stocks start major bear market, the bear market is in proportion to the preceding bull market
• Debt repudiation significant
• Bankruptcies
• Banks and quasi banks in crisis
• Credit crunch � interest rates rise
• International currency crises � a la 1931-34
• Gold and gold equity prices rise as deflation takes hold