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2008 November 11 Tuesday thru November 16 Sunday.

The G20 Summit held in Washington D.C.

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This news even made the front page of the Hokkaido Newspaper complete with a photograph similar the one you can see on the left.

The main purpose of this summit was to solve the looming world financial crisis.

Even though they came up with some statements for the news media about how they are making progress to fix the problems, such as;   "We must lay the foundation for reform to help ensure that a global crisis, such as this one, does not happen again,"  they didn't tell the public what they are really planning to do.

I don't know much about the Bank of Japan, but I do know a little bit about the Federal Reserve Banks (FRB) of the USA. 

Therefore, I would like to share with my readers what little I do know about the FRB, and let them draw their own conclusions as to what will happen next.

Despite its governmental sounding name, the FRB is not a part of the Government of the United States of America. 

It is instead, a cartel of privately owned banking corporations, who have the power to tell the United States Treasury Department, how much money to print, and when to print it.

How did the FRB get started, and how did they get the power that they have now?

The FRB, also called the Federal Reserve System, was created in 1913 by the enactment of the Federal Reserve Act. 

This legislation was rushed through the United States Congress without proper debate on December 23, 1913 when many of the congressmen were not even in attendance, because they were at their homes for the Christmas Holidays.

Despite this incredible fact, President Woodrow Wilson signed the bill into law on the very same day!

The American public was told that the Federal Reserve System would prevent any more financial crisis, which had caused the great depressions in 1893 and 1907.

Now that a small group of private banks controlled the entire money supply of the United States, they rapidly increased the amount of money in circulation during the years 1914 thru 1919 until the money supply doubled, by making extensive loans to other smaller banks, which encouraged those smaller banks made extensive loans to the general public.

Then in 1920, the Federal Reserve began to call in its loans from the smaller banks, and the smaller banks in turn had to call in their loans from the general public. 

This caused the public whom had their life savings in the smaller banks, to rush to the bank and withdraw their money. 

Because the smaller banks didn't have all of that money on hand, many of them had to close their doors. 

In fact about 5,400 smaller banks went out of business during this time.  In other words, bankrupt. 

As a result, the Federal Reserve Bank bought all of these smaller banks at a very low price, further consolidating their monopoly on the banking business.

However, the financial panic of 1920 was just a warm up for what was to come next. 

During the years of 1921 thru 1929 the Federal Reserve again increased the money supply by more than 62% by giving loans the remaining smaller banks, which in turn gave out loans to the general public. 

There was also a new type of loan called a "Margin Loan" in the Stock Market.    Simply put, a margin loan is a loan to stock market investors, whereby the investor can buy, say,  $1000 worth of stock with a payment of only $100 down. 

The stock broker would cover the other 90% of the value of the stock.    This margin loan system works very well, as long as stock prices continue to rise, and it created many new millionaires.   

In fact, this era in U.S. History is remembered as The Roaring Twenties.

Unfortunately, a margin loan can be called in at any time and must be paid off within 24 hours.   

This is know as a "Margin Call".  The party ended on October 24, 1929 when the biggest investors in the stock market, the big bankers, quietly started selling most all of their stocks. 

This forced the stock brokers to make massive margin calls, in order to get the money needed pay the big investors their money, for the stocks which they had just sold.   What happened to the small investors?   

They lost everything they had, and went deeply into debt at the same time. 

Many people committed suicide as a result of this deliberate market manipulation.   This time about 16,000 smaller banks went out of business.

What followed next was the Great Depression of the 1930s. 

Only World War II and The New Deal by President Franklin D. Roosevelt, both of them financed by the International Banking Cartel which drastically increased the money supply again, ended the great depression.

Fast forward to 2008 and the Sub Prime Housing Loan Crisis.

Banks have been lending massive amounts of money to people, so that they could buy houses with no money down and at very low starting interest rates. 

So, many many people who really couldn't afford it, signed housing loan contracts, and bought new houses. 

The catch, is that the mortgage interest rates became adjustable after the first one or two years. 

In other words, what started out as house payments of say $400 per month, suddenly became house payments of $700, $800 and more per month. 

Because most peoples' income did not increase by the same amount, they could no longer afford to pay their mortgages, and had to move out of their new homes.

Sounds a lot like a Margin Call, doesn't it.

Not only that, but the financial markets started to buy up these bad mortgages, and repackage them together into what appeared to be investment grade products, and sell them on the stock market. 

Now, as stock prices continue to fall, the Federal Reserve continues to print more and more paper money, to bailout Wall Street and now the Big Automobile Makers, and maybe the Airline Industry is next in line to get FREE MONEY. 

Money printed out of thin air, with nothing of value behind it. 

This creates INFLATION, a rise in prices of everything, and if the FRB continues print more paper money, HYPER-INFLATION.

In reality, the VALUE of commodities is not going up, instead, the value of the U.S. Dollar paper money is going down.

What do you think is going to happen next?   Put on your thinking caps, and fasten your seat belts.  It's going to be a rough ride.

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