Quote of the Day Archives

"All the perplexities, confusions, and distresses in America arise, not from defects in the Constitution or confederation, not from want of honor or virtue, as much as from downright ignorance of the nature of coin, credit, and circulation."

- John Adams

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"To cause high prices, all the Federal Reserve Board will do will be to lower the rediscount rate, producing in expansion of credit and a rising stock market; then when ... business men are adjusted to these conditions, it can check prosperity in mid career by arbitrarily raising the rate of interest. It can cause the pendulum of a rising and falling market to swing gently back and forth by slight changes in the discount rate, or cause violent fluctuations by a greater rate variation and in either case it will possess inside information as to financial conditions and advance knowledge of the coming change, either up or down. This is the strangest, most dangerous advantage ever placed in the hands of a special privilege class by any Government that ever existed. The system is private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people's money. They know in advance when to create panics to their advantage, They also know when to stop panic. Inflation and deflation work equally well for them when they control finance."

- Representative Charles A. Lindbergh (father of Lucky Lindy) of Minnesota, debating the passage of the Federal Reserve Act of 1913

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"You are a den of vipers and thieves! I will to rout you out, by Eternal God, I will rout you out. If the American people understood the rank injustice of our money and banking system, there would be revolution by morning."

- Our 7th and finest President, Andrew Jackson, promising to kill the central bank. He did. The new central bank trades Jackson's head on their $20 note.

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"The real rulers in Washington are invisible and exercise power from behind the scenes."

- Felix Frankfurter, Supreme Court Justice

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"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance."

- James Madison

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"Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign owners; foreign and domestic speculators and swindlers; and rich and predatory money lenders. In that dark crew of financial pirates there are those who would cut a man's throat to get a dollar out of his pocket; there are those who send money into states to buy votes to control our legislatures; there are those who maintain International propaganda for the purpose of deceiving us into granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime."

- Louis T. McFadden, Chairman of the Housing Banking Committee

On May 23, 1933, McFadden brought charges against the Federal Reserve Board of Governors, The U.S. Comptroller, and the Secretary of Treasury for conspiracy, fraud, and treason. His petition to the Judiciary Committee was ignored. In 1936, Louis was murdered in New York while running for Senate.

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"The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of a pen they will create enough money to buy it back."

- Sir Josiah Stamp, Director, Bank of England

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"I am convinced that this bold approach will cost American families far less than the alternative — a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion."... "The underlying weakness in our financial system today is the illiquid mortgage assets that have lost value as the housing correction has proceeded. These illiquid assets are choking off the flow of credit that is so vitally important to our economy."

- Henry Paulson on his now failed TARP I

Paulson later decided to give all the money directly to the world's richest bankers, instead. TARP I acutely crashed the stock market from 11,000 to 7,500 starting the very minute it was past, making it the worst single financial disaster in the storied history of the stock market.

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"The credit losses associated with subprime have come to light and they are fairly significant, some estimates are in the order of between $50 billion and $100 billion of losses associated with subprime credit problems"

- Ben S. Bernanke

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"Debt is the slavery of the free."

- Publilius Syrus of Rome

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"Endless money forms the sinews of war."

- Cicero of Ancient Rome

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“The reality is, we’re seeing conditions in home construction and home finance that are the worst since the Depression.”

- Steve Fritts, Associate Director of Risk Management Policy, FDIC

[That must be a fun job.]

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"The few who understand the system, will either be so interested in its profits, or so dependent on its favors that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burden without complaint, and perhaps without suspecting that the system is inimical to their interests."

- Rothschild Brothers' communique to associates in New York, June 25, 1863

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"We are completely dependent on the Commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money, we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon."

- Robert H. Hemphill, Credit Manager, Federal Reserve Bank of Atlanta

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"In the days before federal deposit insurance [ed. typo intact: they seem to be confusing the Federal Deposit Insurance "Corporation" with government] the US banking system was plagued by "runs" or "panics." At the slightest hint of trouble, depositors would run to the bank and line up to withdraw their money. All too often, only the first few people in line had any hope of ever seeing their money again; others lost everything. Even healthy banks sometimes failed after rumors caused depositors to withdraw their money."

- Federal Reserve Bank of Boston (link)

Two questions spring to mind:

1 . If banks are safe, why does the Fed say we all have a 0% chance of being paid if we withdraw our money?

2. Why do deposit withdraws cause "healthy banks" to instantly fail?

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"Whomsoever controls the volume of money in any country is absolute master of all industry and commerce and when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate."

- James A. Garfield
Our 20th President.
Shot with a British Bulldog Revolver, July 2, 1881. Killed when his doctors blood-poisoned him, then ruptured his liver with their bare hands on September 19, 1881.

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"The bold effort the present bank has made to control the Government, the distress it has wantonly produced, are but premonitions of the fate that awaits the American People should they be deluded into a perpetuation of this institution, or the establishment of another like it.

- Andrew Jackson, Prez #7

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"All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933"

- Franklin D. Roosevelt
President of the United States of America
April 5, 1933

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"Nothing in the Constitution authorizes the United States to become a member of a corporation created by a state. To permit the United States to become a member of a corporation is corrupting and must destroy the purity of our government. By becoming stockholders, whether stockholders of a road company or a bank, the United States government might wield its power in your elections and all the interior concerns of a state, this would lead to consolidation and that would destroy the liberty of your country."

- Andrew Jackson, 7th President of the United States, handwritten in the "Notes" section of his May 27, 1830 veto of the most extravagant "internal improvements" economic stimulus bill in history. It was passed by congress to avert further economic deterioration by method of skyrocketing the national debt on stimulus spending and to buy stock in private corporations.

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"Censorship reflects a society's lack of confidence in itself. It is a hallmark of an authoritarian regime."

- Potter Stewart, Supreme Court Justice, 1958-81

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"The eyes of our citizens are not sufficiently open to the true cause of our distress. They ascribe them to everything but their true cause, the banking system; a system which if it could do good in any form is yet so certain of leading to abuse as to be utterly incompatible with the public safety and prosperity. The Central Bank is an institution of the most deadly hostility existing against the principles and form of our Constitution."

-Thomas Jefferson

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"Sustained deflation can be highly destructive to a modern economy and should be strongly resisted. Fortunately, for the foreseeable future, the chances of a serious deflation in the United States appear remote indeed, in large part because of our economy's underlying strengths but also because of the determination of the Federal Reserve and other U.S. policymakers to act preemptively against deflationary pressures. Moreover, as I have discussed today, a variety of policy responses are available should deflation appear to be taking hold. Because some of these alternative policy tools are relatively less familiar, they may raise practical problems of implementation and of calibration of their likely economic effects. For this reason, as I have emphasized, prevention of deflation is preferable to cure. Nevertheless, I hope to have persuaded you that the Federal Reserve and other economic policymakers would be far from helpless in the face of deflation, even should the federal funds rate hit its zero bound."

- Ben Bernanke, November 21, 2002, "Deflation: Making Sure "It" Doesn't Happen Here"

(And I hope to persuade you that 40:1 free-market leverage working against you is nothing to sneeze at, as it eats your lunch like it does to most rank amateurs)

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"Throughout my public life I have supported all measures designed to take the Government out of the banking business. This bill puts the Government into the banking business as never before in our history.

The powers vested in the Federal Reserve Board seen to me highly dangerous especially where there is political control of the Board. I should be sorry to hold stock in a bank subject to such dominations. The bill as it stands seems to me to open the way to a vast inflation of the currency.

I had hoped to support this bill, but I cannot vote for it because it seems to me to contain features and to rest upon principles in the highest degree menacing to our prosperity, to stability in business, and to the general welfare of the people of the United States."
- Senator Henry Cabot Lodge, December 17, 1913

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"The difference between the bond and the bill is that the bond lets the money brokers collect twice the amount of the bond and an additional 20 per cent ... It is absurd to say that our country can issue $30,000,000 in bonds and not $30,000,000 in currency. Both are promises to pay; but one promise fattens the usurer, and the other helps the people. If the currency issued by the Government were no good, then the bonds issued would be no good either. It is a terrible situation when the Government, to increase the national wealth, must go into debt and submit to ruinous interest charges."

- Thomas A. Edison, December 6, 1921, NY Times.

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"First they came for the communists, and I did not speak out because I was not a communist.

Then they came for the socialists, and I did not speak out because I was not a socialist.

Then they came for the trade unionists, and I did not speak out because I was not a trade unionist.

Then they came for the Jews, and I did not speak out because I was not a Jew.

Then they came for me and there was no one left to speak out for me."

- Martin Niemöller, 1945

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US Code § 225a:

"The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates. "

Since this law (short title: Federal Reserve Act) was passed by a voice vote of 5 members of congress on Dec 23, 1913, with the body in Christmas recess, the price of one ounce of gold has risen from $20.67 to a high of $1023.50.

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"Ever since the advent of representative government placed the ultimate power to direct the administration of public affairs in the hands of the people, the primary instrument by which the few have managed to plunder the many has been the sophistry that persuades the victims that they are being robbed for their own benefit. The public has been despoiled of a great part of its wealth and has been induced to give up more and more of its freedom of choice because it is unable to detect the error in the delusive sophisms by which protectionist demagogues, national socialists, and proponents of government planning exploit its gullibility and its ignorance of economics."

-Arthur Goddard, a preface to Frederic Bastiat's Economic Sophisms 1846

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Double Quote Today

"I would not have missed it for anything. I have promised myself for ten years I would visit the home of Old Hickory. It is a visit I shall never forget. I have everything that I could get hold of on the life of Andrew Jackson, and now that I am here, I want to say that this alone compensates for the trip."

- Henry Ford (avowed Federal Reserve hater) commenting on his stop at Hermitage while opposing Federal Reserve rip off financing of Muscle Shoals power plant.

"We then must pay interest to the money brokers for the use of our own money... Now, that is what Henry Ford wants to prevent, he thinks it is stupid and so do I."

- Thomas Edison, on the Federal Reserve ripping off the American people by lending us our own money at 230% interest for Muscle Shoals

Both quoted from NY Times, Nov 4, 1921

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"You may remember that in 1851 the New York Herald Tribune under the sponsorship and publishing of Horace Greeley, employed as its London correspondent an obscure journalist by the name of Karl Marx.

We are told that foreign correspondent Marx, stone broke, and with a family ill and undernourished, constantly appealed to Greeley and managing editor Charles Dana for an increase in his munificent salary of $5 per installment, a salary which he and Engels ungratefully labeled as the "lousiest petty bourgeois cheating."

But when all his financial appeals were refused, Marx looked around for other means of livelihood and fame, eventually terminating his relationship with the Tribune and devoting his talents full time to the cause that would bequeath the world the seeds of Leninism, Stalinism, revolution and the cold war.

If only this capitalistic New York newspaper had treated him more kindly; if only Marx had remained a foreign correspondent, history might have been different. And I hope all publishers will bear this lesson in mind the next time they receive a poverty-stricken appeal for a small increase in the expense account from an obscure newspaper man."

- JFK's opening joke in what has become known as his "Secret Societies Speech"

http://www.youtube.com/watch?v=eLn7zbxyrPM

http://www.youtube.com/watch?v=j-eondM7DaA
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This is a controversial QOTD, I know, but it is historically important so we will hear more of it in the future:

"That this should be so among the broad masses may still pass, but for even the circles of the intelligentsia to regard the German collapse as primarily an 'economic catastrophe,' which can therefore be cured by economic means, is one of the reasons why a recovery has hitherto been impossible. Only when it is understood that here, too, economics is only of second or third-rate importance, and the primary role falls to factors of politics, ethics, morality, and blood, will we arrive at an understanding of the present calamity, and thus also be able to find the ways and means for a cure."

- Adolf Hitler, Mein Kampf

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"In 1928 the member banks of the Federal Reserve system borrowed $60,598,690,000 from the Federal Reserve banks on their fifteen-day promissory notes. Think of it! Sixty billion dollars payable upon demand in gold in the course of one single year. The actual payment of such obligations calls for six times as much monetary gold as there is in the entire world. Such transactions represent a grant in the course of one single year of about $7,000,000 to every member bank of the Federal Reserve system.

Is it any wonder that there is a depression in this country? Is it any wonder that American labor, which ultimately pays the cost of all banking operations of this country, has at last proved unequal to the task of supplying this huge total of cash and credit for the benefit of the stock-market manipulators and foreign swindlers?"

- Louis T. McFadden on January 13, 1932, Chairman of the House Banking Committee.

Louis did not live to see the true pain and suffering of the depression he identified, he was murdered while running for Senate

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"From now on, depressions will be scientifically created."

- Congressman Charles A. Lindbergh Sr., 1913 (referring to passage of the Federal Reserve Act)

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"Most everyone we knew wasn't poor, it was just that no one had any money. Nuclear families ate at grandma's house, like we did. There was a 3-gallon pot of vegetable soup on the coal-burning stove 24 hours a day.

It fed 13 of us every dinnertime. Twice a week, I'd be sent to the corner grocers for a fresh free soup bone to revive the taste.

Grandpa, Dad and my uncles all worked at Carpenter Technology - one week on, two weeks off - no unemployment benefits.

Was my childhood happy? Definitely. No television commercials to let me know what I was missing.

Once a week in the summer, my granddad sent me to the confectionery store with two quarters and a large bowl.

I would come back with 10 dips of ice cream, which the family shared while sitting on the front porch.

Usually on Saturdays I got a dime to go to the Strand Theater at Ninth and Spring Streets. Admission was 7 cents, and the remaining 3 cents would buy enough candy to last the afternoon. They always showed a Western, serials, news and a main feature.

Most summer days were spent at the 11th and Pike playground. We kids had fun! With all the activity, obesity in kids was nearly nonexistent.

I think our generation was the best in American history. The late '40s, '50s and '60s more than made up for the privations of the '30s.

Our sense of appreciation for the gifts life offers far outstrips that of today's kids.

I'm glad for the lessons learned during the Depression."

- Gene Fizz, Child of the great Depression

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"I have two great enemies, the southern army in front of me and the financial institutions in the rear. Of the two, the one in the rear is the greatest enemy. The money power preys upon the nation in times of peace, and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes."

- Abraham Lincoln

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“A lot of the sub-prime mortgage paper is not, you know, as good as was thought, originally”

- Ben Bernanke, Jul 19, 2007

This speech has been removed from the Fed Website:
http://www.federalreserve.gov/boarddocs/hh/2007/july/testimony.htm

Marketwatch.com link:
http://www.marketwatch.com/story/subprime-losses-are-bumps-in-road-of-innovation-bernanke

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"A free economy will not break down. All depressions are caused by government interference and “their cure” is always to take more of the poisons that caused the disaster. Depressions are not the result of a free economy."

- Ayn Rand, 1959

1959 Interview Part I
1959 Interview Part II
1959 Interview Part III

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"We'll see how this works out."

- Ben Bernanke, while reiterating that subprime hasn't caused a system-wide credit crunch, July 19, 2007

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"Bernanke: There's No Housing Bubble to Go Bust"

The Washington Post, October 2005 (the absolute peak of home prices)

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"The sub-prime problem has been contained. It's been contained to planet Earth."

Jim Grant, March 2007 (a snipe at Bernanke's nonsense)

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"The Federal Reserve confirmed on Monday (Oct 19, 2009) that it had been testing a key tool for draining liquidity from the financial system – known as “reverse repos” – and might one day conduct such trades with counterparties other than its current group of so-called primary dealers.

In a reverse repo – reverse repurchase agreement – the Fed sells assets such as Treasury securities to dealers for cash, with an agreement to buy them back later at a slightly higher price. In the process, bank reserves are drained from the financial system."

-FT.com (on noticing the Fed was shorting the market)

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"Yes we can!"

-Dave Cash, Phillies 2nd Baseman, rallying the city of Phildelphia to the 1976 NL pennant.



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"You are the definition of moral hazard."

- Senator Jim Bunning, Dec 2, 2009, to B.S. Bernanke

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"Our future is known, it is the past that is always changing."

- Soviet Dissident

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“The worst is over without a doubt.”

James J. Davis, U.S. Secretary of Labor, June 1930

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“Blessed are the young for they shall inherit the national debt.”

Herbert Hoover

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“Once upon a time my political opponents honored me as possessing the fabulous intellectual and economic power by which I created a worldwide depression all by myself.”

- Herbert Hoover

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"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises.... I say after eight years of this Administration we have just as much unemployment as when we started.... And an enormous debt to boot!"

-Henry Morgenthau, Jr., Secretary of the Treasury, May 9, 1939 (U6 17.2% unemployment, same as today)

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"The gospel left behind by Jay Gould is doing giant work in our days. Its message is 'get money. Get it quickly. Get it in abundance. Get it dishonestly, if you can, honestly if you must.'"

– Mark Twain

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"We're gonna need a bigger boat."

- Roy Scheider, 1975, 'Jaws'

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"The more we do to you, the less you seem to believe we are doing it."

- Dr. Joseph Mengele, Chief Universal Health Care provider