What would drive college kids to travelling homeless across the country? A myriad of things.

We can start with the conversion of our economy into a tool for those in power to stay there. It is now pretty much mandatory to go to college to get a job that allows one to support a family. This requires extremely large college loans, automatically putting every single citizen in debt as soon as they begin adulthood. What is the purpose of forcing every single citizen into debt? The answer lies in the Federal Reserve. Hate reading? Watch this 30 minute cartoon that explains the Federal Reserve:

Let’s go back to the beginning of large scale economic corruption, the 1600s.

It began with the goldsmiths in the 17th century. People left their gold in vaults and “bankers” gave people receipts because the gold was too heavy to carry around. Because only a few people would withdraw their gold at any given time, these primitive bankers began giving out receipts to loan more money than they actually held in the vault. Very few were privy to the actual contents of the vaults and, on a case by case basis, the bankers did have enough gold in the vault to justify any one loan. So they would give out these loans and charge interest on them, effectively making money for loaning out money they didn’t really have. The system in effect today is simply a refined form of this primitive banking scam. Everyone who takes out a loan becomes a debt slave to these bankers.

Fast forward to 1910 – Bankers Meet Secretly on Jekyll Island to Draft Federal Reserve Banking Legislation

Over the course of a week, some of the nation’s most powerful bankers met secretly off the coast of Georgia, drafting a proposal for a private Central Banking system, now known as the Federal Reserve. Those in attendance included Nelson Aldrich, A.P. Andrew (Assistant Secretary of the Treasury), Paul Warburg (Kuhn, Loeb, & Co.), Frank Vanderlip (President of National City Bank of New York), Charles D. Norton (president of the Morgan-dominated First National Bank of New York), Henry Davidson (Senior Partner of JP Morgan Co.), and Benjamin Strong (representing JP Morgan).

Dec 23, 1913 – Federal Reserve Act Passed and IRS developed in the same year

Two days before Christmas, while many members of Congress were away on vacation, the Federal Reserve Act was passed, creating the private Central banking system we have today. It was based on the Aldrich plan drafted on Jekyll Island and gave private bankers supreme authority over the economy. They are now able to create money out of nothing (and loan it out at interest), make decisions without government approval, and control the amount of money in circulation. The same year, the 16th Amendment was ratified, which allows the federal government in the federal territory of Washington, D.C. to authorize their private collection company, the Internal Revenue Service, to collect “income tax”

Origin of the IRS,,id=149200,00.html

The roots of IRS go back to the Civil War when President Lincoln and Congress, in 1862, created the position of commissioner of Internal Revenue and enacted an income tax to pay war expenses. The income tax was repealed 10 years later. Congress revived the income tax in 1894, but the Supreme Court ruled it unconstitutional the following year.

On February 3, 1913, Wyoming ratified the 16th Amendment, providing the three-quarter majority of states necessary to amend the Constitution. It was signed into a law by Woodrow Wilson. The 16th Amendment gave Congress the authority to enact an income tax. That same year, the first Form 1040 appeared after Congress levied a 1 percent tax on net personal incomes above $3,000 with a 6 percent surtax on incomes of more than $500,000.

But didn’t the Supreme Court rule the 16th amendment constitutional in 1990 in the US vs. Collins case? (You probably aren’t asking yourself this, but it did.)

The United States government claims that in United States v. Collins, 920 F.2d 619, 629 (10 th Cir. 1990), cert. denied, 500 U.S. 920 (1991), the court cited  Brushaber v. Union Pac. R.R ., 240 U.S. 1, 12-19 (1916), and noted the United States Supreme Court has recognized that the: “Sixteenth Amendment authorizes a direct  nonapportioned tax upon United States citizens throughout the nation, not just  in federal enclaves.”

This statement and claim is a lie.  The Court’s decision taken in the Brushaber case absolutely did not say  that the 16th Amendment authorizes a direct nonapportioned tax, because that would have  engineered a direct and inherent conflict within the Constitution with pre-existing Article I clauses (1,2,3 & 1,9,4) that prohibit direct nonapportioned taxes.

What the Brushaber Court really said was that belief is an erroneous assumption that is the cause of all the confusion. This  Colllins decision is handed down by a 10th circuit that can’t even read the Supreme Court decision without confusing the rejected argument and claims (it’s a direct tax), with the accepted and applied reasoning (it’s an indirect tax) actually adopted in the decision.   Here’s what the Supreme Court really said in the Brushaber decision in prefacing the rejected argument shown above:

“We are of opinion, however, that  the confusion is not inherent, but rather arises from the conclusion that the 16th Amendment provides  for a hitherto unknown power of taxation ; that is, a power to levy an income tax which, although direct, should not be subject to the regulation of apportionment applicable to all other direct taxes. And the far-reaching effect of this erroneous assumption will be made clear …” Brushaber v. Union Pacific R.R ., 240 U.S. 1, 11 (1916)

But whatever, make your own conclusions about the Brushaber case:

1916 – US Supreme Court ruled the 16th amendment unconstitutional, again

“…it clearly results that the proposition and the contentions [240 U.S. 1, 12]   under it, if acceded to, would cause one provision of the Constitution to destroy another; that is, they would result in bringing the provisions of the Amendment exempting a direct tax from apportionment into irreconcilable conflict with the general requirement that all direct taxes be apportioned. Moreover, the tax authorized by the Amendment, being direct, would not come under the rule of uniformity applicable under the Constitution to other than direct taxes, and thus it would come to pass that the result of the Amendment would be to authorize a particular direct tax not subject either to apportionment or to the rule of geographical uniformity, thus giving power to impose a different tax in one state or states than was levied in another state or states. This result, instead of simplifying the situation and making clear the limitations on the taxing power, which obviously the Amendment must have been intended to accomplish, would create radical and destructive changes in our constitutional system and multiply confusion

…From this in substance it indisputably arises, first, that all the contentions which we have previously noticed concerning the assumed limitations to be implied from the language of the Amendment as to the nature and character of the income taxes which it authorizes find no support in the text and are in irreconcilable conflict with the very purpose which the Amendment was adopted to accomplish….

…In fact, comprehensively surveying all the contentions [240 U.S. 1, 26]   relied upon, aside from the erroneous construction of the Amendment which we have previously disposed of, we cannot escape the conclusion that they all rest upon the mistaken theory that although there be differences between the subjects taxed, to differently tax them transcends the limit of taxation and amounts to a want of due process, and that where a tax levied is believed by one who resists its enforcement to be wanting in wisdom and to operate injustice, from that fact in the nature of things there arises a want of due process of law and a resulting authority in the judiciary to exceed its powers and correct what is assumed to be mistaken or unwise exertions by the legislative authority of its lawful powers, even although there be no semblance of warrant in the Constitution for so doing….”

Create money out of nothing? Let’s get back to that. Banks can’t just make money!

The Federal Reserve Act (ch. 6, 38 Stat. 251, enacted December 23, 1913, 12 U.S.C. ch.3) is an Act of Congress that created and set up the Federal Reserve System, the central banking system of the United States of America, and granted it the legal authority to issue Federal Reserve Notes, now commonly known as the US Dollar, as legal tender (they can also give out Federal Reserve Bank Notes which are different). That’s right, the US dollar is created from a private entity! But banks are able to create money in an even more efficient way.

Proof of bank mergers {…-a013113539

For a more digestible list:

(Remember, big corporations hire people to maintain their internet presence, especially on Wikipedia).


Since December 29, 1990 (coincidentally a month after the US vs. Collins ruling) the Federal Reserve Act permits all banks to only be liable (have that amount of vault cash) for 10% of their net transaction accounts (if over $71 million), 3% (if $11.5 million to $71 million), or 0% (if less than $11.5 million). How are they able to create money this way? Let’s say you put $10,000 cash in a large Federal Reserve Bank. The bank is only liable for 10% of that money, so they make sure to keep $1,000 of your $10,000 in their vaults. What happens to the other $9,000 of physical money? The bank gives it out as a loan. Some other person only took out that loan so he would be able to pay for something. Let’s say he buys a car with the $9,000 loan. The car salesman takes the $9,000 and puts it back into a subsidiary of the same increasingly growing (Wachovia was bought by Wells Fargo which also bought the Norwest Corporation which also owned Dial Finance, Toy National Bank, Citizen’s Bank of Sheboygan, United Banks of Colorado Inc., Citibank Arizona, Trans Canada Credit, First United Bank Group Inc., Directors Mortgage Loan Corp., Island Finance, among others) bank conglomerate you originally put your $10,000 in. But remember, your $10,000 is still technically in the bank. If you wanted to take it out right now, you could, save some sort of hidden fee. But this $9,000 that was loaned out of your money is now also in the same bank. Suddenly, the bank has $19,000 on record stored in the bank despite the fact that no more than $10,000 cash ever flowed through their system. It’s exactly like the goldsmith scheme from the 1600s.

Keep in mind that when the Federal Reserve was created, its proponents claimed that a private banking system would guarantee the absence of economic boom and bust cycles. An analogy you could use today would be the Federal Reserve “pushes on the brakes or gas” to control monetary inflation, by either creating more money (out of nothing) or creating less money. This in itself is not necessarily a bad idea. The problem (as per usual) is the implementation.

Dictionary of American Biography, Vol. XIX, p. 412–13. New York: Charles Scribner’s Sons, 1936.

Sixteen years after the Federal Reserve Act was passed, the worst economic depression to ever hit the world coincidentally occurred in 1929. Between 1923 and 1929 the Federal Reserve inflated the value of the dollar by 62% while at the same time mass media (newspapers) were promoting the “riches that could be made on the stock market” inducing investment by an otherwise disinterested common populace. Paul Warburg (a German banking baron and early proponent of the Federal Reserve) issued a warning in his annual report to the stockholders of his International Acceptance Bank  March 8th, 1929 “If the orgies of unrestrained speculation are permitted to spread, the ultimate collapse is certain not only to affect the speculators themselves, but to bring about a general depression involving the entire country.” The revelation of the Federal Reserve Board’s final decision to trigger the Crash of 1929 appears, amazingly enough, in The New York Times. On April 20, 1929, the Times headlined, “Federal Advisory Council Mystery.” In an effort to consolidate their wealth, the Rockerfellers, Rothchilds, Morgans (among others with insider information) sold all their stock at peak prices, then used it to buy all the now failing, non-insider, stock of small banks and businesses for pennies on the dollar.   page 34

Although we have not had another depression of the magnitude of that which followed 1929, we have since suffered regular recessions. Each of these has followed a period in which the Federal Reserve tromped down hard on the money accelerator and then slammed on the brakes. Remember, the whole point of giving the Federal Reserve the ability to do this is exactly to prevent this kind of regular global recession from happening.

How exactly is the Federal Reserve used to maintain power? Let’s take a look at the most recent crisis we are enduring, The Great Recession.

Hopefully you have reached a reasonable conclusion about how certain individuals profited immensely from the Great Depression at the expense of everyone else. FDR passed various laws to prevent this from happening again, but all were eventually either repealed or simply ignored. Take for instance the Glass-Steagall Act, which prevented banks with consumer deposits from engaging in risky investment banking activities. In 1998 Citicorp and Traveler merged forming Citigroup, in direct violation of the Glass-Steagall Act. The Federal Reserve (which supersedes government authority) gave Citigroup an exemption for a year while the heads of Citigroup lobbied to get the Gramm-Leach-Bliley Act passed, which overturned Glass-Steagall, setting a precedent for other gigantic bank mergers. This led to what came to be known as the securitization food chain. Borrowers (people like you and me) would take out loans from lenders (local banks). These lenders sold the loans to investment banks, in order to profit from investments and not be responsible for , creating something known as collateralized debt obligations (CDOs). The investment banks in turn sold the CDOs to wealthy investors. The investment banks paid the big three investment rating agencies (Standard & Poor’s, Moody’s, Fitch) to give these CDOs the highest credit rating they were able, regardless of the actual stability of these investments.

From 2004-2007 all the big banks (Bank of America, Citigroup, JP Morgan-Chase) were bundling and selling bad loans they knew would eventually fail and getting them packaged as AAA. Lenders were giving out loans frivolously because now only the investors would lose money if the loans were not repaid on time. This caused the Great Recession in which we currently live. But it was only the giant banks who got bailed out, not the citizens who actually needed money to keep their homes. State-level investigations on these predatory lending schemes began to be conducted in 2003 but were eventually shut down for some reason by the Bush administration. What started out as federal inaction turned into active obstruction of state and local legislative attempts to rein in predatory lending. In 2004, the administration launched an offensive against the new state anti-predatory lending laws. That year, a little-known agency in the Treasury Department known as the Office of the Comptroller of the Currency (OCC) adopted a rule exempting national banks and their mortgage lending subsidiaries from most state lending laws protecting consumers. The OCC rule was patterned on a similar Office of Thrift Supervision (OTS) rule from the 1990s exempting federal thrifts from state lending laws.

The OCC rule might not have been so bad if the OCC had replaced state anti-predatory lending rules with stringent rules of its own. But it did not. Meanwhile, the OCC and OTS rules created the impetus for subprime lenders to duck state restrictions on subprime mortgages by becoming subsidiaries of national banks or federal thrifts. The OCC and OTS rules created such an unlevel playing field that the FDIC even considered adopting a copycat rule for the state-chartered community banks that were subject to FDIC supervision.

The State of Michigan challenged the OCC rule in a case that eventually made it to the U.S. Supreme Court. Along with many consumer law professors, we hoped that Justice Scalia and other conservative justices on the Court, with their strong views on states’ rights, would strike down the OCC rule. Our hopes were dashed in April 2007 when the Court affirmed the OCC rule, just in time for the unfolding subprime crisis. The dissent included an odd assortment of bedfellows, including Justice Scalia, Chief Justice Roberts, and Justice Stevens. While Michigan’s challenge to the OCC rule was working its way through the courts, home prices were rising steeply in many parts of the country and borrowers were finding it harder to qualify for standard fixed-rate mortgages. By 2005, subprime loans had captured 20 percent of the lending market, double their share four years earlier. These new subprime loans were even riskier than subprime loans from the late 1990s. Many of the 2005 vintage loans dispensed with documenting borrowers’ incomes. Adjustable-rate mortgages (known as ARMs for short) with introductory rates that reset to much higher rates after set initial periods became the norm. Numerous borrowers with so-called hybrid ARMs found their monthly payments doubling overnight when their introductory periods expired. Finally, lenders were liberally waiving down-payment requirements, leaving borrowers with scant equity in their homes.

On the consumer side, borrowers were so stretched financially that they could not afford down payments or safer fixed-rate mortgages. On the industry side, lenders and brokers were resorting to desperate risks to keep up loan volumes. We also worried that no-documentation loans were just a pretext for fraud. By 2006, reports were surfacing in the press that lenders were qualifying borrowers based on low introductory interest rates, rather than on the higher eventual interest rates they would have to pay. Often borrowers who obtained these loans could not afford the new rates when they reset. Furthermore, many of them relied on assurances by their brokers that they could refinance if their monthly payments became unaffordable. That strategy only worked if home prices continued to rise, but they did not. In short, the breakdown in subprime underwriting standards was a train wreck waiting to happen.

The first signs of serious subprime distress appeared in late 2006 and finally stirred federal officials from their slumber. That fall, the Federal Trade Commission held a roundtable on the risks presented by hybrid ARMs and other exotic mortgages. The roundtable made a serious attempt to analyze the emerging dangers of these products. Not long after the FTC roundtable, federal banking regulators fi nally rolled out a guidance warning about the dangers of exotic mortgages. While it was better than nothing, the guidance was only advisory in nature. Lenders did not have to follow it, and many of them did not. Even when the subprime house of cards collapsed in early 2007, federal regulators continued to drag their feet. It was not until July 2008 that the Federal Reserve Board finally issued a comprehensive, binding rule on subprime mortgages. By then, those mortgages were failing in droves and the pillars of the global financial system had begun to crumble.

The majority of the US population was against the bailout of private banking firms, yet Obama went through with it anyway. Why would he do that?

Corporate corruption

On top of all this, private corporations are working with the IRS and Federal Reserve to profit on top of all their legitimately obtained profits.

1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings. (Source: Exxon Mobil’s 2009 shareholder report filed with the SEC here)

2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. (Source: here, ProPublica here, and Treasury here)

3) General Electric made $26 billion in profits in the United States over the past five years and, thanks to clever use of loopholes, paid no taxes.(Source: Citizens for Tax Justice here and The New York Times here. Note: despite rumors to the contrary, the Times has stood by its story.)

4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009. (Source: See 2009 Chevron annual report here. Note 15 on page FS-46 of this report shows a U.S. federal income tax liability of $128 million, but that it was able to defer $147 million for a U.S. federal income tax liability of negative $19 million.)

5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year. (Source: Paul Buchheit, professor, DePaul University, here and Citizens for Tax Justice here.)

6) Valero Energy, the 25th largest company in America with $68 billion in sales last year, received a $157 million tax refund check from the IRS and, over the past three years, received a $134 million tax break from the oil and gas manufacturing tax deduction. (Source: the company’s 2009 annual report, pg. 112, here.)

7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department. (Source: Bloomberg News here, ProPublica here, Treasury Department here.)

8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury. (Source: Paul Buchheit, professor, DePaul University, here, ProPublica here, Treasury Department here.)

9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2006 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction. (Sources: Profits can be found here. The deduction can be found on the company’s 2010 SEC 10-K report to shareholders on 2009 finances, pg. 127, here.)

10) Carnival Cruise Lines made more than $11 billion in profits over the past five years, but its federal income tax rate during those years was just 1.1 percent. (Source: The New York Times here.)

But wait, it gets worse.

This isn’t just happening in our own country anymore.

The powers that be have amassed so much wealth, they have recently been able to develop the World Bank and the International Monetary Fund. These are essentially just bigger, badder versions of the Federal Reserve. The IMF is notorious for giving out loans to poor third world countries, then making them back into slaves when they can’t pay their loans back fast enough.

In 1930 Rothschilds-funded the Bank for International Settlements as a banking authority for both the IMF and the World Bank. This entity wants to develop a global currency, and all money would be centrally located within it. It is espoused as a global, economic safety net. What was it that Ben Franklin said?  They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.


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