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Nov. 11, 2011 - Freedomain Radio - Stefan Molyneux
12:53
2027 Is the Federal Reserve Private? And The Penn State Child Rape Allegations
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Hey everybody, it's Steph from Freedom Aid Radio.
Get a lot of comments that people say, Steph, you just don't understand, man.
The Federal Reserve is a private agency.
This is not true.
Let's deal with some facts. Federal Reserve is 12 regional Federal Reserve banks.
They have boards of directors and they are directed by the seven-member Federal Reserve Board in Washington.
And these have the power to determine big aspects of banking activity, so they set interest rates and reserve requirements and other operational requirements.
There are no shares of the Washington Fed board.
The only, quote, ownership of the Fed is in the shares of each of the 12 regional banks, which are entirely owned by the private member banks within their respective districts.
This is according to a formula based on their size.
So they have to subscribe to the shares with 3% of their capital plus a surplus.
Now, this is quasi-ownership.
First of all, you're forced to own shares in the Fed.
That's not the free market.
Also, the shares can't be sold, and they pay a guaranteed 6% annual dividend, which is not bad these days.
Now, they say it's a non-profit organization, so it turns over its profits to the U.S. Treasury after expenses including the 6% that it pays out to the member banks.
But the system as a whole is highly profitable to the member banks because the 6% is really just the tip of the iceberg.
So the banking profits that come through this privileged and monopoly creation of money Occurs at the member bank level of operation.
And those profits are not turned over to the Treasury, right?
So the fact that the Fed is giving this monopoly control of the creation of money, which it then farms out to these banks, the profits that the banks make from that is not turned over to the Treasury.
So the net earnings from the member bank's privilege with relation to the Fed, they're not turned over to the government, but are kept by the private member banks.
Nobody knows because the Fed is not audited very much.
In the US, it's considered perhaps maybe a hundred billion to two hundred billion per year in profits.
In the UK, it's been estimated at 41 billion pounds.
But it's quite a lot of money, is really what we're saying.
So, is the Fed private or is the Fed public?
It was created, of course, in 1913 to, quote, maintain the stability of the financial system.
How's it doing? Not very well, but, of course, quasi-governmental institutions rarely get fired.
The president appoints and the Senate confirms the members of its board of governors and the details of its responsibilities are subject to congressional oversight.
That's really in theory. The reality, of course, is that the Fed will tell Congress, not ask Congress, what it's up to and what it's doing.
Alan Greenspan said, there is no other agency of government which can overrule actions that we take.
The current chairman of the Federal Reserve Oversight Committee, one Dr.
Ron Paul, has tried and so far not been successful in his attempts to pass legislation to allow for a comprehensive audit of the Federal Reserve.
Bloomberg News fought the Fed in court for years to get it to disclose who it was loaning the bailout money to.
As a result, the information was recently disclosed, and wouldn't you know it, the Federal Reserve loaned out $26 billion to Libya's central bank.
Because, you know, it's hard to fight a war if your enemy doesn't have money to buy stuff.
Now, there is this sort of...
I consider it a legal fiction.
The Federal Reserve System is, quote, owned by its member banks.
But the reality is that this...
What does this mean? It means that the banks are taxed to help pay for the support of the Federal Reserve.
If the private banks really owned the Fed, then how could its officials be appointed by the government?
And the, quote, owners are compelled to, quote, own the Federal Reserve Board by force of government statute.
So... When you have private profit and public control, that's actually called fascism.
And so the Federal Reserve is much more of a fischistic monopoly.
I mean, the IRS deposits people's income tax checks directly into the Federal Reserve banks, not into the US. So that's really, really important to understand.
Of course, there are two fundamental powers that the Fed has that are not free market.
And it's really the definition of Fed power.
The first is the power of counterfeiting, the power of creating money out of thin air.
And the second, which is related, of course, is the power to set interest rates, either directly or indirectly, through the purchase and sale of bonds.
Well, you try setting that up.
You try setting your capacity up to create your own currency and see what happens.
Government will throw your ass in jail.
And you try getting banks to set interest rates through the force of your personal weapon of choice, and, of course, you will be thrown in jail for bank robbery.
Because, remember, small crimes get you a sell.
Huge crimes get you a crown.
Some people have asked me what I think of this Penn State situation.
It's grisly and it's tragic and it's monstrous.
And it is the result of people's primitive, ridiculous, embarrassing and retarded addiction to sports.
On the one hand, that's sort of on the draw side, on the pull side, on the push side.
There are massive subsidies propping up these athletic programs at top sports colleges in the US. It's more than $800 million in student fees and university subsidies, a good deal of which come from the US government.
They're propping this stuff up.
Plus there's, of course, the subsidization of stadiums and so on.
And so some students are paying more than 50% of the budget for athletics.
And, of course, I mean, people say that the cost of tuition is rising.
Well, this is because of subsidies, right?
So, college students reportedly devote 3.2 hours to education on the average weekday versus almost four hours for, quote, leisure and sports.
Six-year graduation rate for bachelor's students is only about 56%.
A lot of the students are not very serious about their education.
That was certainly my experience in college.
Almost half of full-time college students binge drink or abuse drugs, and the incidence of this behavior is going up and up.
And between 1983 and 2007, energy consumption costs at America's colleges rose twice as fast as those same costs in the private sector.
They're not very cost-conscious, and why would they be when they're getting all this free government money?
Now, what is telling about this Penn State monstrosity of a situation is the words that aren't being used, right?
So this student found one of the assistant coaches anally raping a 10-year-old boy and reported it, and they covered it up.
And, you know, they got this guy to not be alone with kids in that particular facility.
And the guy who saw him ended up showing up at a bunch of charity events that this guy was at and where he was trying to reach out to more underprivileged youth.
And you won't see, I've not seen anywhere in the media, child rape.
It's always sexual assaults or anal penetration or something like that.
But it's child anal rape.
It is the sole murder of an innocent little boy, who I guess now is not such a little boy anymore.
This has been going on for many years.
It was reported in 1998.
And the assistant coach actually confessed.
He said, yeah, this is what I'm doing.
And it didn't go anywhere because they follow the money.
And the money is where the sports are.
And this is a perversion, of course, in American education as a whole, where you got the rocks for jocks, idiot courses, and passing jocks up.
It's really brutal on the jocks, of course, right?
I mean, should we have a lot of sympathy?
Perhaps not. It's brutal on their bodies, and very few of them ever make a career out of it.
They just get their Knees and backs wrecked for the sake of stimulating the jaded and decadent Roman-style crowds cheering on this mess, this nonsense.
I mean, everybody understands.
I mean, come on. Everybody understands that sports is ridiculous.
I mean, it's fun to play.
I love sports. I love sports.
I play lots of different sports and really, really enjoy it.
Sports, great exercise, great competition, great fun.
But we all understand that cheering for a sports team is ridiculous.
If you're born on this side of the street, you cheer for these guys.
If you're born on that side of the street, you cheer for the guys with slightly different color dyes in their uniforms.
And it's all ridiculous and embarrassing, but this is what people create in an empty society, right?
There's a vacuum of intimacy.
There's a vacuum of self-knowledge.
There's a vacuum of values.
There's a vacuum of morality.
And we can only meet each other in reality.
People are so locked up in fantasy that they're incredibly isolated.
and the vacuum of their isolation draws them together in this empty-headed, jeering, cheering, dumbass crowd of sports idiots.
It's a symptom of loneliness.
It's a symptom of isolation.
It's a symptom of having nothing to talk about of any substance or meaning.
And in that vacuum, a crowd is created in a vacuum.
When two people are actually connected and happy and love each other, they do not feel the need to lose themselves or rather to echo their emptiness in the squalling idiocy of a crowd.
So the crowds are created by a vacuum of intimacy.
The vacuum of intimacy or non-intimacy of the modern world is created by fantasy and delusion and ridiculousness and immorality.
And so people can't connect.
They're too full of delusions, and so because they can't connect, you end up talking about nothing.
Because people, through their lack of values, become trivial, they end up having nothing to talk about except trivia.
And if you take away the popular topics of conversation, the emptiness that people experience in their relationships, the void, the hollow, little, square Dostoevskian space in the void that people's soullessness inhabits,
you take away the popular topics of conversation or the popular activities of self-erasure, Drinking, drugs, raves, sexual pursuits, sports, weather, TV shows, all of the emptiness that masks as syllables that pass not between people but through them because they don't exist.
We are the ghosts of absence in the modern world.
You take away these topics of conversation and people panic.
They freak out. They face that existential emptiness, which means grow or admit your expiration date was many years ago.
And so of course there's going to be significant numbers of Penn State students who are going to riot.
Based upon the ouster of their coach and the possible interference of the empty-headed, drinking-based, vacuous pursuit called sports addiction, I mean, you take it away.
You're taking away the drug of choice for the empty, and that's painful and alarming and scary.
I mean, there's no greater coward than the man or the woman who will speak of nothing of importance.
That is a terrifyingly empty way to live, and the only way...
To believe that it's not empty is to merge together with other empty people and seal your fate.
So yeah, of course the children don't matter.
It's because these people all have had such traumatized childhoods that they end up so empty and sports addicted to begin with.
They need that sports addiction far more than they need the moral victory over a child rapist.
And so yeah, they will choose to support...
A rapist, a child rapist, rather than have stripped from them or have revealed to them the emptiness of the stupid addictions that tie them down to this deep and bottomless well of emptiness.
So it is tragic, but it is unfortunately inescapable.
Until we have some kind of real values in society, until we give up on fantasies, until we learn how to truly connect with each other, we will not have the basic empathy required to have a society where even if these horrors exist and occur, they are promptly reported and dealt with,
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