Bernanke begins:

“The U.S. economy has contracted sharply since last fall, with real gross domestic product (GDP) having dropped at an average annual rate of about 6 percent during the fourth quarter of 2008 and the first quarter of this year. Among the enormous costs of the downturn is the loss of nearly 6 million jobs since the beginning of 2008…. According to the CBO’s estimates, by the end of 2010, the stimulus package could boost the level of real GDP between about 1 percent and a little more than 3 percent and the level of employment by between roughly 1 million and 3-1/2 million jobs.”

Nevermind the fact he is understating the actual number of job losses, but what he in effect is saying is:

“We, the FED, have helped instigate a new Depression, and the Obama Stimulus Plan is going to fall flat on its face. GDP dropped by way over 5% for the past two quarters, and we would be lucky to get a 2% increase from the Stimulus. The economy shucked way over 6 million jobs, job losses are continuing to mount and the Obama Stimulus Plan will be lucky to get back a quarter of that. Perhaps if the FED had not manipulated interest rates (slide 40), helped suppress the price of gold, and regulated OTC derivatives, this mess would be a lot less severe. Sorry about that.”

Bernanke:

“Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth… Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance.”

My translation:

“We are screwed because we are spending like drunken sailors!! Those Austrian economists are right!! Just look at the White House budget for the next ten years, and keep in mind the figures after 2011 are wildly optimistic.”

“See the $2 trillion deficit for 2009 and the $1 trillion deficit for 2010 and 2011? That’s our doom staring back at us, although our rampant printing of money might ease the pain for the elite few a little bit. See the tax increases in 2012 and 2013? We are going to try to increase income taxes or implement carbon taxes or some other nonsense so we can jack up tax revenue by 25%, but hopefully we can hold off on this until Obama is re-elected.”

Source: Pages 26-27 of 344 in the White House’s FY 2010 budget

Bernanke: “In this environment, we anticipate that inflation will remain low.”

Translation: “We don’t really have any clue what is going to happen next as we are in uncharted waters. The credit markets are opaque, so it’s even possible we may deflate for a few years until we hit a Misesian crack-up boom and the currency fails through hyperinflation (though true CPI/inflation is around 7% . However, hopefully we can get inflation instead by creating lots of lots of new money (or “inject liquidity”) and keep it from spiraling into hyperinflation.  Good thing many Americans still do not understand how the FED works.”

Bernanke:

“As a consequence of this elevated level of borrowing, the ratio of federal debt held by the public to nominal GDP is likely to move up from about 40 percent before the onset of the financial crisis to about 70 percent in 2011. These developments would leave the debt-to-GDP ratio at its highest level since the early 1950s, the years following the massive debt buildup during World War II.”

Translation:  “My international banker and military-industrial complex friends love these profit-making opportunities. War truly is a Racket, just like the highest-decorated officer in the history of the Marine Corps, Major General Butler, once figured out. Too bad too few listened to him, otherwise I would not have a job.”

Bernanke:

“Let me close today with an update on the Federal Reserve’s initiatives to enhance the transparency of our credit and liquidity programs… We expect to begin publishing soon a monthly report on the Fed’s balance sheet and lending programs that will summarize and discuss recent developments and provide considerable new information… We will continue to look for opportunities to broaden the scope of the information and supporting analysis that we provide to the public.”

Translation:

“Crap. I really can’t believe 190 Representatives have co-signed H.R. 1207, Ron Paul’s bill to audit the FED. It’s a good thing my international banker friends have pretty much bought the Senate, that 17^th Amendment of 1913 that my forefathers got passed along with the Federal Reserve Act of 1913 is a real lifesaver! We will keep throwing sand in Congress’ and the American peoples’ eyes for as long, as hard, and as fast as we can.”

Please check here to see if your Representative have co-signed HR 1207, the Federal Reserve Transparency Act of 2009. I also recommend contacting your Senators (the bill there is known as S 604) and writing directly to the Financial Services Committee at this link. It’s time to fight back.

The following is a message from Alan Greenspan’s “vaunted Federal Reserve” to the “Average Man.”  (Hat-tip to LeMetropoleCafe.com for the lead.)  (photo)

On January 17th, 1978, Federal Reserve Chairman Arthur Burns stated from the meeting transcript (emphasis mine):

“You know, the American public, in contrast to some or many of our politicians–perhaps most of them–is very deeply concerned about inflation. People all over the country have been asking themselves the question:

“What can I do to protect my family? What can I do to protect my children, my family, and myself against the ravages of inflation? And gradually the thought has evolved and is spreading rapidly that, on the negative side, putting money in the bank or a savings and loan account is no protection.

“Buying bonds, Treasury bonds or corporate bonds, is no protection. Buying common stocks is no protection. It used to be a major protection but it no longer is.

“Then what is left? Well, gold or paintings. But the average man cannot invest in gold; he doesn’t know how. It’s not something he’s accustomed to. Likewise with paintings.

“What will he turn to? Well, there is farm real estate, a remarkable record there. But the average man doesn’t know how to buy farm real estate. He realizes that location can make an enormous difference. But there’s one thing the average man is capable of doing. If he doesn’t have a home, he can buy a home. If he already has a home, he can buy another.

“The average man is also capable of judging neighborhoods. All he has to do is get into an automobile or walk and he can locate areas where the prospect of maintaining good conditions in the neighborhood or some improvement are pretty good over the next ten years or twenty years. People can do that. And they’re doing it in increasing numbers. It’s surprising to me. I hear it from college professors; I hear it from young people; I hear it from my own children.”

Frankly speaking, Chairman Burns is either something of a simpleton or quite the deceiver, much the same as I when I proved his current successor, Ben Bernanke is a liar in “Bernanke’s Great Lie – The “Gold Standard” and the Great Depression.”  Why?

Well, first please understand that our brilliant Keynesian economists created currency that is 100% pure DEBT. That’s right, the U.S. Petrodollar (and all other world currencies too!) is simply debt as I explained in gory detail here “The Money Matrix – What is a Dollar Bill Worth?“. All holders of dollars are technically debtors to the Federal Reserve, who kindly extended to you constantly depreciating currency-credit created with a pen and a flick of wrist in the form of Federal Reserve Notes.

By using these FRN’s – as is mandated by the force of decree (or by fiat) our nation’s legal tender laws – you are in debt to the Federal Reserve, which is a quasi-private banking cartel created by the bankers, for the bankers, as I describe here “The Money Matrix – Who Owns the FED“. Also, classifying the elite market of painting with gold is just plain ignorant. I do not know of a single central bank that holds “paintings” as an asset, but they ALL hold gold.

Furthermore, while Burns seems to sneer at the stupidity of the “Average Man,” it does not seem that he realizes that the “Average Man” is actually quite a bit smarter than he is. For you see, people have long realized that if they leave money in the bank over the long haul, the rate of interest they earn is much less than the rate of inflation. Although savings increase in nominal dollar terms, they lose purchasing power.

Back when gold and silver were in use as lawful and honest money** one could receive interest – in gold grams or silver grams – that had real value. Since these precious metals are scarce, their purchasing power tended to grow over time as the economy became more efficient at outputting goods and services. This was literally the invention of retirement, prior to this invention you typically worked until you died or could work no longer. This greatly expanded the leisure time of a society and is also why people back in the 1800s referred to this as the “miracle” of compound interest. (photo)

For the “Average Man” there have long been two escape hatches from the Keynesian and Fabian Socialist doom-economics. These were 1) the stock market and 2) real estate.  In recent times, this got so bad that people started to referring to “saving” money in their 401k equities and pension bonds, to “investing” in a home. People are now realizing that stocks and bonds are either speculation or investing, depending on your level of knowledge. Homes are “investments” of a sort – homes really are longer-term durable goods – but far too many American have really been speculating, not investing, as we now recognize.

However, despite reports of the economy’s “green shoots” – pardon my French but replace the “oo” with another vowel to summarize my thoughts – these two escape hatches have been firmly sealed on our sinking global economic submarine piloted by the FED and the Bank of International Settlements (BIS) in Basel, Switzerland. People trying to retire have seen their “savings” disappear, but hopefully will now realize that real “savings” are held in the form of physical gold or in a bank account…. or will the banking system also give way? I made a case for this here in “Off a Cliff with No Airbags: The FED Banking System Quivers in Fright“.

After Burns’s speech, the price of gold never went lower. In January 1978, the monthly close was $175/oz. In September of 1980, the monthly close reached $670/oz.  As GATA has painstakingly made clear from its’ long list of evidence, governments and central bankers have colluded to suppress the price of gold to make their own currencies look better.  Just as the London Gold Pool experienced momentary success and then perished in 1968, gold and its holders will win this war.

These days, the “Average Man” has a new defender who will never betray them to the immoral madness of the central bankers. This is my message.

This is the first of several articles on Ellen Brown’s superb 2007 book titled “Web of Debt,” now updated in a December 2008 third edition. It tells “the shocking truth about our money system, (how it) trapped us in debt, and how we can break free.” Given today’s global economic crisis, it’s an appropriate time to review it and urge readers to digest the entire work, easily gotten through Amazon or Brown’s webofdebt.com site. Her book is a remarkable achievement – in its scope, depth, and importance.

In the forward, banker/developer Reed Simpson said:

“I have been a banker for most of my career, and I can report that even most bankers (don’t know) what goes on behind (top echelon) closed doors….I am more familiar than most with the issues (Brown covered, and) still found it an eye-opener, a remarkable window into what is really going on….(Although many banks follow high ethical practices), corruption is also rampant, (especially) in the large money center banks, in one of which I worked.” FULL ARTICLE

Well, Dr. Paul has tried this variants of this theme multiple times before over the past 30 years. For instance, HR 1148 was introduced in 1999 to abolish the Federal Reserve and obtained a whopping zero co-sponsors. This was repeated in HR 2755 in 2007. Result? Zero co-sponsors. Paul’s new clever strategy has been to extremely limit the scope of the bill – just audit the books of the FED, nothing more – and has been able to tap into the wide-ranging dissatisfaction surrounding the October 2008 banker bailout, the Obama stimulus plan, and the outright socialization of our banking, auto, and insurance sectors.

It only takes half a brain and a pulse to get angry about the fact that the central bankers gave the American people the equivalent of a middle finger on Bloomberg’s Freedom of Information Act request. The FED denied to disclose how they used $2 trillion dollars in open market operations that they executed outside of Congressional authority. Congress has no clue how the FED used the money either since that is not how the FED works.  Without an audit, Congress also has no clue how much gold our nation owns. (photo)

So what’s the big picture? Basically, the legislative process in Washington is usually as slow as molasses, and most bills die in committee with the obvious exceptions of very long lobbyist bills like the USA PATRIOT Act and urgent banker bailout-stimulus plans that no one in Congress admittedly even has time to read before voting on them. Ron Paul is a veteran legislator, and most of his bills this decade are quite short – HR 1207 is 446 words – and follows the K.I.S.S. Principle: Keep It Simple Stupid. Obviously he has not had a lot of success, but that’s mostly been due to lack of cooperation.

In the case of HR 1207, Paul has chosen this battleground wisely – who wants to be on the “No” side with all of the popular sentiment against it? Campaign for Liberty and Liberty Maven, two sites that publish my articles, and many more like-minded sites have thrown all their momentum into winning this one small battle. Galvanized supporters have watched in awe as the number of co-sponsors rise from 11 to 33 to 88 to 134 at present, an impressive feat.

The New American recently quoted Austrian economist Thomas Woods’s doubts as saying, “[The FED] is too complicated for most Americans. This isn’t going to galvanize people. I was wrong! He’s taken an issue that wasn’t even an issue, and he’s got a lot of Americans suddenly fascinated by the Fed, by monetary policy, by the Austrian business cycle theory.”  My thoughts are that Woods is severely underestimating both the number and intelligence of Paul’s supporters, especially when it is so apparent our future prosperity as a society is at stake.

The fight to pass HR 1207 by the House is winnable. Even if it fails, the rEVOLution will have learned a very important fact – which of the Representatives on either the Financial Services committee or in the House itself can be viewed as domestic enemies.

Disdain for what the FED has done to the American people is one of the reasons I am running for Congress in Pennsylvania’s 15th district, and also why I have contacted my current representative multiple times to co-sign HR 1207. I published my latest letter to him, and a reader asked the following questions. As a wanna-be Congressman, I thought I would take a shot at answering them!

Q: “What does it take to get this bill out of committee and on the floor of the House for a vote?”

A: The bill is currently in committee and must pass before a House vote can be called. It is possible the bill will be tabled, or die, while in committee. To pass, the committee must have quorum – the necessary amount of representatives present to vote on it. The exact number needed to obtain a quorum is determined by each committee. Passing requires a majority of those in attendance at committee before moving to a House vote where a simple majority is needed – this is democracy at work! This process is described here, see page 21/67.

Q: “How many co-sponsors does it need to force that? Or does that even matter?”

A: The number of co-sponsors does not matter. However, it does indicate the expected minimum support a bill will receive on the House floor, so is a key indicator while in committee. While bills are in committee, they can be marked up and amended, which is why the simplicity of Paul’s bill is key.

Q: “Is it really a matter of getting Barney Frank to move it to the House for a vote? What’s the process? Does anyone know?”

A: Representative Barney Frank, D-MA, is the chair of the Financial Services committee of 70 representatives. He has not co-signed the bill, and traditionally is allied closely with the banking special interests and the FED, so no cooperation can be expected from him.  Several weeks ago, Frank spoke about Paul, HR 1207, and committee politics – while boldly proclaiming that there is no inflation.

It is my guess that Campaign for Liberty and Ron Paul will take their time to have their supporters keep banging away on their local representatives to rachet the number of co-sponsors higher. Over 150 would be impressive, to say the least. At this point, page 20/67 states:

“Three or more members of a standing committee may file with the committee a written request that the chairman call a special meeting… If the chairman does not call the requested special meeting within three calendar days after the filing of the request, to be held within seven calendar days after the filing of the request, a majority of the members of the committee may call the special meeting by filing with the committee written notice… “

Since there are already three co-signers, the first step can be completed at any time. However, I think it would be best to target the remaining 6 of 29 Republicans on the committee who have not co-signed and try to pick up more than one Democrat (the other 40 have not co-signed) before proceeding. These six possible Republican banker-buddies are located in the states of NJ, NY, CA, and PA and here is a downloadable interactive list. Supporters of HR 1207 should contact any red-listed member as a top-priority (see below).

Rely on sites like Campaign for Liberty and Liberty Maven to keep up with the current status. When the bill goes to committee, it will be time to melt the phone wires on the phones of those Financial Services members still in red.

HR 1207 is not just an audit of the FED, it is an audit of your local Representative!

The United States has reported the largest reserves – over 8,100 tons, but GATA (the Gold Anti-Trust Committee) reports these holdings may not exist as they are strangely reported as “Deep Storage Gold.” 

Congressman Ron Paul’s bill, HR 1207, the Federal Reserve Transparency Act, will audit the Federal Reserve, including our gold supply.  This week over 20 more co-sponsors joined, bringing the bill to 88 co-sponsors.

From my experiences of having lived in Shanghai, China for the past 3-4 years and having read the IMF reporting rules, I have the following comments:

1. China has a lot more gold than this doubling of their official reserves – for instance any state bank holdings are not reported to the IMF. One day the world will wake up and realize India and China possess a large amount of the gold in the world.
2. The timing of this announcement is, of course, an eco-political power play.  The gold price and the shrinking future spreads will be key to watch.
3. From 2006 through mid-2008 you could buy gold in the bank shops, and at banks, but this was fairly difficult to do.  In mid-2008, a massive propaganda campaign hit the major banks, with gold displays in bank lobbies and active advertisements.
4. Asian populations have a deep cultural appreciation and respect for gold as money, unlike most Americans.
5. China took over the title of world’s largest gold mine producer from South Africa last year.

As the integrity of the US banking system is compromised, private citizens should consider becoming their own central banks.  The days of irredeemable paper fiat currencies may be approaching its end, and there is a reason why the central banks hold gold – it is their default insurance.

Do not be fooled, the gold reserves of central banks are their actual Money.  Debt-based paper dollars, yen, pounds are all just ridiculous currencies, sad shadowy mirrors of their former selves, which is gold and silver coin.

So, got gold?