Creature from Jekyll Island

Frederick R Smith has moved to Frederick R. Smith Speaks (substack.com)

Foreword

History teaches us that war is often a fight for one thing, but the real cause is a hidden secret. The new war includes the following elements: Covid-1984, riots, defund the police, and reparations. They all have one thing in common - Money.

Introduction

The inspiration for this paper is the book “The Creature from Jekyll Island: A Second Look at the Federal Reserve” by Fred Griffin. This fascinating book takes you through a journey about money from the beginning of organized society to today. The Creature explains the origins of currency from bartering, precious metals, to today’s fiat (worthless) money. The key historical theme is the banking cartel called the Federal Reserve. The elite birthed the Fed at Jekyll Island, North Carolina in 1913. If you take this journey, you can learn all about the real programs that make certain people very wealthy by Ponzi schemes. Written long before Enron and the Enron-like scandals, this book explains the Ponzi schemes that make up the monetary system!

Good as Gold

The Constitutional Convention denied congress the power to print paper money. We can be certain of this because the original draft of Article I, Section 8 [1] included the words “and emit bills of credit of the United States.” “Bills of credit” were understood by all to mean “paper money.” James Madison’s record of the Convention states: “This was a favorable moment to shut and bar the door against paper money.”  The Founders rejected the phrase, and by an overwhelming vote, struck it from the Constitution.

Later, during debates about Article I, Section 10 [2], the Founders further barred the creation of paper money. The original draft wording read-only, “No State shall ... coin Money ...” Madison’s account here is brief: “Mr. Wilson and Mr. Sherman moved to insert after the words ‘coin money’ the words ‘nor emit bills of credit, nor make anything but gold and silver coin a tender in payment of debts’ making these prohibitions absolute ...” The Creation of the Federal Reserve in 1913 "fixed" that problem as that is the year that Congress gave away its duty to regulate sound money.

To understand the actions of the Founders, it is necessary to have a brief understanding of the history of money. As Jefferson said, every county abused paper money (where used). Prior to the adoption of the Constitution, the Continental Congress issued bills of credit. These were nothing more than paper money with no backing (fiat currency). The inflated fiat paper currency imposed a cruel hidden tax on the citizens, as it has in all other countries, and they lost their fortunes. “Not worth a Continental” describes the dollar, that in 1779, was worth only a penny. Thomas Jefferson said, “Paper is liable to be abused, has been, is, and forever will be abused, in every country which it is permitted.”

A further reason for the Founders’ action was their desire to restrain the state governments. Specifically, flooding the country with fiat paper money. Some states were already issuing bills of credit. Rhode Island even forced its circulation by attempting to punish citizens for refusal to use it. Josiah Quincy wrote to George Washington, “there never was a paper pound, a paper dollar, or a paper promise of any kind that ever yet obtained (became) a general currency but by force or fraud, generally by both.”

Inflation, deflation, and depression all had brought misery to the new nation, prompting Washington to write: “Good God! Who could have foreseen or predicted the disorders which have arisen in these states!” (1787 letter to General Knox). It is at this point that the Constitutional Convention convened in Philadelphia. Those who had experienced such trauma wanted to restrain their government from issuing paper money and forcing it into circulation.

On August 16, 1787, the delegates approved Section 8 of the Constitution barring Congress from the right to print paper money. On August 18, they framed Section 10 stopping the “friends of paper money” from going through the State Legislatures. Soon after the adoption of these two Articles, the tide turned, and the nation began to prosper. Its economic ills began to disappear, and the leaders rejoiced. In 1790, George Washington said:

“[revenues] were considerably more productive than it was imagined they would be ... spirit of enterprise prevails . . . our public credit stands on that high ground which three years ago it would have been considered ... madness to have foretold ... the United States enjoys a sense of prosperity and tranquility under the new government that could hardly have been hoped for.”

On December 16, 1789, The Pennsylvania Gazette declared:

“Since the federal constitution has removed all danger of our having a paper tender, our trade is 
advanced fifty percent. Our ... people can trust their cash... and have brought their coin into circulation.”

The Constitutional mandate for a sound currency prevented an economic depression. This resulted in prosperity and progress. The new mandate stated that the government could not manipulate the money. It required a currency that had intrinsic value for the citizens. The Constitution protected the individual’s right to own precious metals and to use them as a medium of exchange. The results were amazing even to Mr. Washington. Andrew Jackson in his 8th Annual Message to Congress, 1836 made this salient declaration:

“It is apparent from the whole context of the Constitution as well as the history of the time which gave birth to it, that it was the purpose of the Convention to establish a currency consisting of the precious metals. These were adopted by a permanent rule excluding the use of a perishable medium of exchange... or the still more pernicious expedient of paper currency.”

Increasing Inflation

In early 2020 we read that the economy is up, crime is down, and inflation is flat. If one were able to consume computers for nourishment, inflation is indeed flat. Regardless of the administration or congress in power, inflation is a misunderstood term. The economy was up - the economy of nothing (no material wealth but inflated Ponzi schemes like Enron). Call our system the “Sienfeld economy, the economy about nothing.”

The basic reality of inflation is the fact that it is a hidden tax. It is the result of the increase in the supply of money and credit. When the value of the 1940-dollar compared to the purchasing power of today, it is only worth about 50 cents. Another salient point to consider is the fact that inflation has nothing to do with supply and demand (rising wages and prices). In fact, these are the symptoms of the damaging effects of pumping money without backing into the economy. This the fiat currency backed by nothing more than the faith of the people.

Some will defend this system by saying that yes, there is some gold. The amount of gold is small as “fractional” backing is the name of the method where money starts with some backing. The banks can take an initial amount of money then loan out large quantities of new money based on the original amount. The banks have only a fraction of the original money “in the vault” in reserve for this new money, henceforth “fractional banking.” When flooding the money supply with new fractional or close to fiat notes, the remaining currency will drop in value. As a result of this “watered down” money, businesses need to raise prices to get the required value for their services or products.

Workers want an increase in wages to compensate to money that buys less food and other essentials. To counter the notion of backed (e.g. precious metals) money, the banking elite say our money has the backing of the "faith in the nation.” The establishment will rarely talk about the notion of fiat money. The establishment demonizes important people who talk about fiat currency. Former congressman Ron Paul of Texas is an example of a person of consequence who faced demonization for talking about this issue.

While the current system may seem to place the brakes on rampant inflation, fiat money will cause the bubble to completely burst. The bankrupt notion claiming “backed” money will no longer work. The driving force of fiat money is out-of-control federal spending and manipulation of the amount of money in circulation. Furthermore, as the government initiates more unnecessary programs it will spend more than its income. Politicians are reluctant to raise taxes. “Borrowed” funds will pay for the deficits. The deficit was less than one trillion before 1980. Today, it’s over twenty trillion and counting! To wit, the daily interest on the debt is one billion dollars.

The government often “makes” money by selling treasury bonds to private banks. The banks then resell these bonds to the Federal Reserve. With this transparent operation, the Federal Reserve issues printed paper money or bank credit to pay for the bonds. Reminds me of the great movie starring George C. Scott – “The Flim-Flam Man.”

We heard that the government counters the national debt by borrowing from the Social Security “trust funds.” This is the payroll taxes that currently exceed the amount necessary to pay benefits. The government “borrows” this payroll-tax surplus and then spends it as part of the general budget. More than one trillion dollars in Social Security trust fund surplus have evaporated as a result of this wonderful operation.

We have all have heard about taxation without representation. Inflation is worse because it is a hidden tax – very few have a clue that this legal plunder occurs. No wonder it is so popular with the politicians and the banking elite. Furthermore, it is cruel as it punishes those who can least afford it. This includes retirees, people on fixed incomes, and those who work hard to remain self-sufficient). Is our money as “good as gold?”

Enter the End Game

In 2020, we face a pandemic and a Marxist insurrection. Meanwhile, to fend off the crash, new money makes it way to the world. For the Trump fans, the plain truth suggests you get ready; the system will collapse under massive debt. Does not matter what candidate gets “voted” in, the debt can never go away in any lifetime. A Biden administration will make the crash happen too with the oligarchs ushering in socialism in a fast-paced march. Get ready, stock up on nonperishable food and get some cash.

This current dilemma is fueled by an enemy within. It is the Marxist insurrection spawned in education and academia. Defund academia!

[1] Article 1, Section 8, Clause 5: Congress shall have the power “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.”

[2] Article 1, Section 10, Clause 1: “No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.”