"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Wednesday, November 26, 2008

Kennedy, the Fed, EO 11110 and simply doubling the money in circulation

Few people know and less remember that on June 4th 1963 President John Kenndy before his brain was air conditioned in Dallas signed an Executive Order :

Executive Order 11110 AMENDMENT OF EXECUTIVE ORDER NO. 10289

By virtue of the authority vested in me by section 301 of title 3 of the United States Code, it is ordered as follows:

Section 1. Executive Order No. 10289 of September 19, 1951, as amended, is hereby further amended-
By adding at the end of paragraph 1 thereof the following subparagraph (j):

(j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12,1933, as amended (31 U.S.C.821(b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of any outstanding silver certificates, to prescribe the denomination of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption
and --
Byrevoking subparagraphs (b) and (c) of paragraph 2 thereof.
Sec. 2. The amendments made by this Order shall not affect any act done, or any right accruing or accrued or any suit or proceeding had or commenced in any civil or criminal cause prior to the date of this Order but all such liabilities shall continue and may be enforced as if said amendments had not been made.

John F. Kennedy The White House, June 4, 1963.

It appears that this EO has never been revoked but since Lyndon Johnson took over after Kennedy's asssination has been totally been ignored. A number of "Kennedy bills" were indeed issued with the heading "United States Note" (see pic - note red ink) - but they were quickly withdrawn after Kennedy's death.

One source says .." As a result, more than $4 billion in United States Notes were brought into circulation in $2 and $5 denominations. $10 and $20 United States Notes were never circulated but were being printed by the Treasury Department when Kennedy was assassinated"

This is seen by many students of the curious nature of the Federal Reserve as a swipe at Fed and it's powers... as explained here

The "Federal Reserve System" is a network of 12 central banks to which most national banks belong and to which state chartered banks may belong. Membership rules require investment of stock and minimum reserves.

Privately-owned banks own the stock of the Fed. This was explained in more detail in the case of Lewis v. United States, Federal Reporter, 2nd Series, Vol. 680, Pages 1239, 1241 (1982), where the court said:

Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stock-holding commercial banks elect two thirds of each Bank's nine member board of directors.

Similarly, the Federal Reserve Banks, though heavily regulated, are locally controlled by their member banks - these privately owned banks actually issue money:
The Federal Reserve Act was a law which created Federal Reserve banks to act as agents in maintaining money reserves, issuing money in the form of bank notes, lending money to banks, and supervising banks and is administered by Federal Reserve Board. President Wilson's signed it on December 23, 1913.

This is what he said subsequently ..

"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."
In 1964, the House Committee on Banking and Currency, Subcommittee on Domestic Finance, (pdf - essential reading) at the second session of the 88th Congress, put out a study entitled Money Facts which contains a good description of what the FED (para 47)is: "The Federal Reserve is a total money-making machine. It can issue money or checks. And it never has a problem of making its checks good because it can obtain the $5 and $10 bills necessary to cover its check simply by asking the Treasury Department's Bureau of Engraving to print them". Any one person or any closely knit group who has a lot of money has a lot of power. Now imagine a group of people who have the power to create money. Imagine the power these people would have. This is exactly what the privately owned FED is! "

Do read this clear simple analysis of what the Fed is and how it acts.

The Fed moves to buy up debt today

The Fed pledged today ( announcement was released at 8:15 a.m. ET )to purchase up to US$500 Bn. in so-called agency debt as well as up to US$100 Bn. in direct debt of Fannie Mae and Freddie Mac, the world’s two largest mortgage buyers, and Federal Home Loan Banks. The
Fed also said it would set up a $200 billion program to support consumer and small-business loans. They call this in the bewildering world of credit crunching programs - the Term Asset-Backed Securities Loan Facility (TALF). (Terms & Conditions pdf)

Together, the programs almost match the $864 billion of U.S. currency in circulation, as reported by the Fed in a Nov. 20 statement.

Whilst mortgage rates quote dropped from say 6.5% to as low as 5.25% the biggest drag on house sales in the US is the unsold stock.

In 2005 this stock was equal to 4.5 months sales, in 2007, the supply averaged 8.9 months - it was 10 months in September 2008 and according to the National Association of Realtors said in a Nov. 24 report 10.2 months. In 2007, the supply averaged 8.9 months, almost double the 4.5 months in 2005, the end of a five-year housing boom.

Together, the programs almost match the $864 billion of U.S. currency in circulation, as reported by the Fed in a Nov. 20 statement.

These guys don't fuck about when you cross them ...

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