Fed’s “mad experiment” in dollar debasement stokes fresh jitters
Paul Joseph Watson
Friday, November 5, 2010
With the world on the verge of a currency war as the Federal Reserve follows through on its dollar-killing quantitative easing program, rumors are once again swirling of a “bank holiday,” during which US citizens will be prevented from withdrawing money or at least limited in the amount of the withdrawal they can make.
The bank holiday is rumored to be set for next week, with Thursday November 11 pinpointed as the likeliest date.
According to radio host Steve Quayle, a pastor was told by one of the managers of a prominent east coast bank that banks would close for an undetermined amount of time, and that when they reopened, “all withdrawals by checks would be limited to $500 per week – no matter what the balance in the account is.”
Limiting the amount of money customers can withdraw or blocking the facility altogether reminds us of a Citigroup advisory that was sent to customers at the start of the year which stated that the bank reserved “the right to require (7) days advance notice before permitting a withdrawal from all checking accounts.” The story stoked fears that financial institutions were preparing for bank runs.
On his website, Quayle asks, “When in U.S. History has a sitting President taken off on an overseas trip for an extended period of time, with 65 airplanes, 34 warships reportedly 3,000 people including his friends and cohorts, at the pinnacle of an economic and political upheaval?”
Fears of a bank holiday first arose in June of last year, when it was rumored that banks would close their doors in early September. Concern was fueled by reports that US embassies in foreign countries were purchasing large quantities of local currency.
With Brazil and other countries now threatening to take drastic currency measures to protect themselves against a dollar crisis, a similar financial environment is stoking identical fears.
Bank holidays are not without precedent in the United States. On March 5 1933, newly elected Franklin Roosevelt declared a “bank holiday” that lasted four days, during which he rammed through the Emergency Banking Act which granted FDR near dictatorial control over the dealings of banks. The Act also forced every citizen and business in the country to relinquish their gold in exchange for paper currency.
The 1933 bank holiday served as a face-saving mechanism for many financial institutions – thousands of them never reopened after the closure period had ended.
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While we expect it to be business as usual next week and the rumors to subside as they did last year, the mere fact that this fear keeps cropping up shows how jittery the economic landscape is right now.
Indeed, the debate is no longer about whether the US financial system and the dollar will come crashing down or not, but if that inevitable process will be characterized as a sudden collapse or death by a thousand cuts. The latter seems to be more likely, with a few lurches and leaps along the way, the first of which was Ben Bernanke’s announcement on Tuesday that the Fed will buy $600 billion of U.S. government bonds over the next eight months.
The blame for this turmoil can be laid firmly at the feet of Bernanke, acting at the behest of the Fed’s owners, who having promised in June last year that they would not monetize the debt of the U.S. government. have now embarked upon a “mad experiment” that will precipitate “the collapse of the US dollar paper standard,” as CLSA’s Chris Wood describes it.
As the Honorable Louis McFadden, Chairman of the House Banking and Currency Committee, warned in 1933, the Fed does not care that it is killing the dollar because its role is to represent the interests of its international owners and its Wall Street cronies, not the American people.
“Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders,” said McFadden.
So while the happy clappers on Wall Street are drunkenly celebrating the fact that their artificially inflated stock market is surging solely as a result of the value of the dollar being eviscerated, Main Street is hunkering down for a long winter, beset by worries about hyperinflation, rising food prices and gas price hikes, as oil follows gold’s meteoric rise, again solely as a result of the Fed’s decision to debase the greenback.
Financial upheaval has been matched by political upheaval, and we can only hope that Congressman Ron Paul and his son, Senator in waiting Rand Paul, can build momentum to finally cut out the cancer that is destroying America – by ending the Fed for good.
This article was posted: Friday, November 5, 2010 at 5:25 am