Leading Ethically Only is an educational outreach of Leadership Ethics Online (LEO). Essays range widely--from ethical analysis of the news, to ethical challenges to leaders in society, to personal reflections of an ethical nature. We welcome your thoughts and criticisms to make us better.

Sunday, April 18, 2010

The FED's Hoenig Has Conflict of Interest

The Federal Reserve's Thomas Hoenig appeals to let the FED handle the current crisis, and the calls to break up the banks. He is a banker. He is a multi-millionaire. He wants to control whatever happens to his industry, his way, the way of his fellow board members on the FED.

The Federal Reserve Board is a collection of banks. They do not represent the interests of U.S. citizens, nor have they ever done so. The FED always has recommended money supplies and interest rates that enable banks to maximize profits. Those who sit on the FED's board have vested interests in their power to continue to take profits as they see fit. They want to avoid any legislation that curtail profits and their authority to control them.

U.S. paper currency has printed on it, "Federal Reserve Note." Though this currency is printed by the U.S. Bureau of Printing and Engraving, the currency itself is a non-interest-bearing promissory note issued by the FED. Not until after the passage of the Federal Reserve Act of 1914 did the most powerful banks in the U.S.--who made sure they had seats on the FED--begin to use their legal authority to issue notes they backed.

Prior to 1933, Americans could redeem paper notes with gold. Prior to 1964, they could redeem Silver Certificate for silver. Interestingly, and ALL Americans should mark this, foreign holders of U.S. paper currencies could redeem their notes in gold until 1971. The banks took away from Americans any right to call for anything of real market value. "In God We Trust" they could. But the banks took away any trust that anything other than that they would keep the obligation to carry FED promises in their pockets.

No chairman of the FED has been appointed without foreknowledge he was at the service of the banks sitting on the board. For years, the billionaires owning and controlling the media have lauded and praised America's FED chairs and U.S. Treasury heads--also completely within the family, and under the complete control of the banks--as the saviors of the nation.

How ironic that the picture above captures both some of the principal architects of today's debacles, and the desired propaganda to sooth all the sheep being sheared for so long.  The once-great bell curve of the American Middle Class filled banks' savings and checking accounts, pension funds, and other savings instruments.  The FED--read now, "the wealthiest banks who had the billions to leverage for their seats on its board"--fought hard for many years to repeal the Glass-Steagall Act of 1933.  Finally, in 1999, three Republican Congressmen, proposed and succeeded in passing into legislation the Pandora's Box so long prayed for by all the banks sitting on the FED.  The Federal Modernization Act (Gramm-Leach-Bliley) unlocked previously restricted access to all the wealth in the American Middle Class.

When he was placed at the head of the FED, Ben Bernanke was like all his predecessors.  His closest friends and associates were in the banking industry.  He never would have been entrusted with his 14-year term on the FED, or the chairmanship, except for the common consensus he never would harm the interests of those who put him where he is today.  The same is true, of course, for every FED board member, the member institution is represents, and the foreign billionaires who own if not controlling, then powerful blocks of shares, in each one.  The interests of bans, and those who actually own them, always have been transnational, not merely American only, as the entire history of the FED shows, from its beginnings.

We rebuke any statements made by the FED on what ought to be done.  For any statements made never, ever will run counter to the interests of the members of the FED.  If the banks and financial institutions feel enough heat, if they feel impending federal legislations will curtail past profit margins, then they will "join" the chorus for reform.  But they will join the chorus systematically, and place choir members in strategic places, to ensure that the only song later to be sung will harmonize with the best possible potentials for profits in a reformed marketplace.

No banker, no one connected with banks and finance, including members of our Congress--many with the longest and closest ties with these industries--will ever exchange the right to shear American sheep, even though they know the infections from their many years of nicks and cuts already have, and will continue, to decimate the population.  Why do they do this?  They all are transnational.  For many years, they have been shifting their investments into foreign sheep who will live on to take the place of the good Americans who trusted their shearers.

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