Reaping What Bretton Woods Has Sown

An excerpt from Bob Chapman's weekly publication.

April 2 2011: The Bretton Woods agreement in 1944, a license to steal under the Federal Reserve Act, a model for finance that no longer works well, tax breaks for the wealthy and budget cuts for the rest of us, the possible re-monetization of silver, Fed discloses its discount borrowers for the first time ever, bailed out banks dump US workers in favor of offshore labor, Cal teachers pension system exposed, notes on the TARP bailout.

The seeds of today’s monetary problems were laid at Bretton Woods, NH in 1944, as a combination of socialists, communists and fascists laid the groundwork for the IMF, the World Bank and the eventual elimination of gold from the monetary world. The Federal Reserve’s role was to bring that about from behind the scenes.

In the intervening years in order to move toward those goals the banking system run by the privately run Federal Reserve, allowed banks, some of which were run by the owners of the Fed, such as JPMorgan Chase, Goldman Sachs and Citigroup, were allowed to run rough shod over the system, always knowing they would be bailed out by the public. These banks have had and continue to have a license to steal under the illegal Federal Reserve Act. Over and over again these banks, Wall Street, insurance companies and transnational corporations have been bailed out of their speculations under the aegis of too big to fail. The excuse has always been that it must be done to protect the public. These entities got to keep the gains and the public got to share in the losses. The public and 95% of those working on Wall Street and banking didn’t have a clue to what was really going on. The Fed and other major central banks were not only playing this Fed game domestically, but internationally as well. Over those years the Fed had been designated the lender of last resort. We saw them in action over the last 3-1/2 years during what was termed the credit crisis. The Fed’s job was to bail out not only the US banking system rent asunder by bank speculation in the mortgage market, but to also bail out the buyers of such mortgages, known as MBS and CDOs, sold to British and European banks and other financial entities, which had purchased 60% of the toxic waste. If you notice not one of these lenders or buyers ever filed a civil or criminal suit against these purveyors of what has become to be known as toxic waste. We can only speculate, but we believe the dumping ground for this mortgage garbage was preset and that some of the buyers if not all were guaranteed by the Fed that if problems arose they would be bailed out and one way or another made whole. The Fed attempted to hide what they were doing and a lawsuit has finally forced them to divulge, who received funds created by the Fed, some $13.8 trillion, why and what collateral was accepted for such loans and have such loans been repaid. Another program called TARP was set up by the Treasury to bail out Wall Street, banking and transnational conglomerates all involved in this tight little circle of anointed corporations. This bailout program was accomplished by Treasury Secretary Paulson. He told Congress if the funds were not forthcoming for the insiders to bail themselves out via speculation based on inside information, then he would see to it that the financial system was brought down and destroyed. The highhanded ruse or extortion worked and these miscreants received their funds from the public Treasury, as well as from the Fed.

Gold backing for the US dollar was part of the result of the confereence at the Mount Washington Hotel in Bretton Woods in that July of 1944. We have to interject here that in 1946 or 1947 I climbed Mt. Washington and once I reached the hotel it started snowing. Yes, snowing in August. The group of us from the camp quickly raced back down through the forest to better climes, which the snow failed to reach. Thus, 2 or 3 years after that historic meeting, I briefly visited that hotel, of course, not knowing what had taken place there.

This UN Monetary and Financial Conference, which included the International Bank for Reconstruction & Development, which became the World Bank, which was to make loans to the rubble that was to be Europe in 1945, and to which those economies, promote monetary cooperation and fix exchange rates, and eventually to eliminate the use of gold, as the backing and basis for international currency exchange, replacing gold with a fiat paper standard controlled by the Federal Reserve. The discipline of gold was to eventually be phased out of the system, so that the fed could create money out of thin air. This would be a perpetual tax on Americans as their currency dropped in value versus gold over the years. Currencies would no longer be exchanged in terms of their gold value. This was called a gold exchange standard. The public could not exchange US notes or Federal Reserve notes for gold, but nations could. The value of currencies versus one another, all of which were backed by gold was set by supply and demand. If a nation created too much currency the value of their currency would fall versus gold and other currencies. This method of monetary policy had previously been set into law by the passage of the Federal Reserve Act. The concept was to eventually have a world bank that would create a fiat currency for all nations that would supersede all other currencies. That, of course, is still underway today as elitists strive for a one-world currency and a new-world order. These concepts were promulgated and put in place by well-known Fabian socialist John Maynard Keynes, who as we reflect back was the author of an economic system that was corporatists fascist and the then Treasury Secretary, Harry Dexter White, who was a communist. It took 27 years, and on August 15, 1971, President Richard Nixon removed the US dollar from the gold exchange standard. That is how the fiat dollar was generally planned and that is why we have non-gold Federal Reserve notes today, instead of a gold backed currency.

The elitists’ corporatist fascist model is not working very well. The Fed, the Bank of England and Western banks have serious problems and throwing money at the problems is not working. Of course, do they want the solution to work? This depression they have deliberately created is not working the way they envisioned it would. In fact they are having trouble keeping it under control. We have just seen what is called a “black Swanâ€