Conspiracy Theories That Surround The Federal Reserve: Part III

In the first two parts of this series on the conspiracy theories that surround the Federal Reserve, we looked at the popular G Edward Griffin conspiracy which traced the formation of the Federal Reserve from the Jekyll Island meeting forward to present. As I laid out in both parts I and II, the Jekyll Island meeting was the culmination of the national banking power over US politics. It was literally a meeting of the nations power brokers (the “money trust”) in a smoke filled room where the future of the nation was discussed.

The Jekyll Island meeting is an easy target for conspiracy theorists. The problem lay in that they then make this rather credible event the lynch pin of a broader, all encompassing conspiracy. In Griffin’s case, the Jekyll Island meeting plays the frontman for a conspiracy of “Fabian Socialists” who were behind not only Woodrow Wilson, but everything else from the Soviet Union to the US Environmentalist movement. Griffin’s conspirators wait behind the power of the United Nations to strip away our power when we are weakest in the name of Socialism.

Griffin commits three logical fallacies:

  1. That the power hungry group of national bankers at Jekyll Island are involved in a great campaign for Socialism.
  2. That such a campaign has been able to be handed down from person to person, decade after decade without instead becoming corrupted.
  3. That such a conspiracy has been able to grown in power and yet remain unknown to all but a handful of people.

The truth is that humans seek money and power first, and ideology is a far second. Once the Jekyll Island crew got their banking cartel embodied in the Federal Reserve, they had no profit motive to pursue a broader political agenda. Second, all movements become corrupted. The FARC rebels in Columbia started out as Communist Revolutionaries, turned to drugs to fund their operation, and are now simply drug lords operating under any other name.

As for the notion that the banking conspirators have simply grown in power since Jekyll Island, I can’t dispute that because we are talking about the nebulous “they” rather than any one group in particular. However, let’s take a look at a couple of specific “theys” from American history, Jay Cooke and Citigroup Inc.

Jay Cooke was a banker who threw a considerable sum of money behind getting Salmon P Chase selected as Secretary of the Treasury under Lincoln. As the Civil War raged, Chase turned to Cooke to sell the bonds the government needed to finance the war. Jay Cooke made a fortune. He took his fortune and went into the railroad business, and promptly went broke in the Panic of 1873.

Citigroup was one of the most powerful banks in the United States. As the Federal Reserve is a private organization held by its member banks, we can believe that Citigroup, as one of the largest member banks, held incredible say over the actions of the Federal Reserve. And yet it’s broke.

Just because there are powerful people who are the cronies of politicians who then throw them their taxpayer dollars does not make them infallible. We are all only human; as such we are all subject to episodes of hubris that then brings about our downfall. Easy money eventually corrupts and destroys any thing it touches, and the chief handlers and dispenses of it are not immune from its effects. Far from being some powerful illuminate, they tend to end up embarrassingly going broke just like everybody else.

Which bring up a figure that a blog reader turned me on to, Andrew Gauss who can be heard every Wednesday (or via podcast) from One Radio Network. Andrew Gauss is a rare coin dealer who believes that gold is a winning investment long term but that rare gold coins will far out perform bullion itself. Every Wednesday he can be heard describing the actions of “the boys” (his term for the shadowy cabal that is behind central banks everywhere) who are the real forces behind current events. Ironically, it is his belief in the overarching power of “the boys” that keeps him from believing in the collapse of the dollar. As he puts it, “I just don’t see how they could profit from it… Show me the profit and I’ll believe it.”

Andrew would like for us to all rest safe at night in the security of knowing that the US dollar is not going to fail any time soon because it would not be profitable for those who really run the world for it to do so. Instead he believes that they are the ones with their hands on the printing presses who will profit from the coming inflation that will sweep the nation this year. This begs several questions:

  • Was it really profitable for “the boys” for the Depression to drag on year after year?
  • And weren’t some of the boys wiped out with the collapse of Citigroup? If the owners of the United State’s national banking system (who essentially own the Fed) aren’t part of this shadowy group, then who on Earth is?
  • Isn’t history replete with examples of tales of financial ruin from those who should have known better?

Andrew Gauss is a bit of a mixed bag as goldbugs go. He loves gold, he knows a great deal about gold, but he also believes in the power of paper money. He believes that, were we to return to a gold standard, that there would be “tumbleweeds in the streets” because all business would collapse.

Instead he believes that the American people need to merely put their own hands on the printing press. If we could use the power of fiat money to finance projects which would bring our nation a good return on its investment (such as renewable power). In this way, Mr. Gauss is returning full circle to the promise of the Greenback party we discussed in the first section of our tale.

The problem with all of these conspiracy theories is that it does not stand human experience. We are all fallible. The more powerful among us seem to have the most spectacular failures. How are we to believe these people (and who are they exactly?) are able to pass down power from generation to generation and never fall from grace or be exposed?

These shadowy figures, are merely the bogey men of the Libertarian imagination. They are there to scare us into our beds and night and keep us buying gold. Which would make Andrew Gauss, and myself for that matter, rather happy.

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