#3 Bankocracy: Rule by Banks
Review by Sue Peters
INTRO
This is a review of the third episode of John Titus' series, The War for Bankocracy: Unmasking the Hidden Power of Central Banks. The third episode is called The Fed Independence Lie.
The word 'bankocracy' means rule by banks. The impetus behind this series is the publication in 2024 by the Biden White House of a memo, 'The Importance of Central Bank Independence.' The goal of the series is to inform people of the current attempt by the Federal Reserve ('Fed') to convince Congress and the American public that the Fed should have total sovereignty over money creation — that is, have no oversight by our Congress.
BIDEN WHITE HOUSE MEMO -- LIES
One of the lies found in the Biden White House memo, The Importance of Central Bank Independence, is found in its following words [italics added by this writer]:
"Research, theory, and evidence all reveal that a central bank's ability to carry out monetary policy without political interference is a critical component of its ability to control inflation."
Titus exposes the lie totally. He analyzes the difference between the Global Financial Crisis of 2008-9 (GFC) and the Pandemic Crisis of 2020-22. from the point of view of Congress demanding transparency from the Fed. He proves that:
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the Fed's response to GFC did not cause inflation — because Congress and the public demanded transparency
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the Fed's response to the Pandemic did cause inflation — because Congress and the public never demanded transparency. The Fed put 4.6 trillion dollars into the hands of non-bankers. Only the Fed knows who they are!
THE FED SYSTEM IS A DUAL MONEY SYSTEM
It is very important to understand that there are two kinds of money in the Fed System.
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FED BANKS/reserve money: Fed Bank accounts are only used by member commercial banks. The money in them is called 'reserve money' or 'reserves'. Reserves are CREATED by the Fed Banks whenever they buy a financial asset (such as Treasury bond) from the member bank.
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COMMERCIAL BANKS/checkbook money: Commercial bank accounts are used by households and businesses. This is the 'money supply'.
This money is called "bank deposits" or "checkbook money." Bank deposits are CREATED by the bank. When a commercial bank signs a loan agreement with a borrower, the bank CREATES a deposit in the borrower's bank account, equal to the principal value of the loan. Therefore, commercial banks CREATE the money supply out of DEBT.
THE FED SYSTEM IS PRIVATELY AND ANONYMOUSLY OWNED
Federal Reserve Regional Banks are corporations whose shares are 100% owned by their private commercial banks. Larger banks own more shares and have more control. The New York Fed Bank is the most powerful central bank in the world, and is owned by the large Wall Street banks. But one cannot find out who owns the Wall Street banks, because their ownership is hidden behind legal walls.
WHY A DUAL SYSTEM?
The dual system hides from the public where the real power resides in the System. Households and businesses deal with bank deposits (made from our debt to these banks). We are weakened by this part of the system, because it is based on our debt. The banks, however, use reserves to function (the other part of the system).
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When a customer writes a check, the funds are transferred to another customer at another bank. The receiver's bank will not credit the funds until they receive 100% reserves into their Fed Bank account. This is the real money backing the deposit.
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When a customer wishes to withdraw a deposit in cash, the bank gives him Federal Reserve Notes. These Federal Reserve Notes are bought by the bank with their reserve money at the Fed Bank.
The power of the system resides in the Fed Banks' CREATION of reserve money.
WHAT HAPPENS WHEN CONGRESS EXERCISES OVERSIGHT: THE Global Financial Crisis (GFC) AND NO INFLATION
Titus shows that the demand by Congress, for transparency from the Fed during the Global Financial Crisis (GFC), was important in restraining the Fed from inflationary money creation.
The Congressional demand for the names of banks that were bailed out put a check on the Fed. Negligent Fed Bank regulation of commercial banks, leading up to the GFC, allowed "Too Big To Fail" (TBTF) commercial banks to create an orgy of unsound, speculative loans. These loans went bad. To bail out the banking system, the Fed Banks bought these bad loans from the commercial banks, giving them newly-created "reserve money."
WHAT HAPPENS WHEN CONGRESS OVERSIGHT IS MISSING: The Pandemic Crisis AND INFLATION!
The Fed took advantage of the fear of Congress at the Covid-19 pandemic. The Fed took full sovereign power in their hands and caused the largest inflation in the U.S. since the end of World War II. Congress never exercised its oversight and demand for transparency.
Instead of creating reserves by buying securities from member banks, the Fed did something novel – it bought securities directly from non-banks. By going directly to non-banks, each purchase created both 1) reserves in the bank of the non-bank 2) a deposit in the bank account of the non-bank. Presto! Both reserves and deposits are created simultaneously. Presto! Inflation.
Here is the proof, using statistics direct from the Fed itself:
Think about the following:
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Reserves and bank deposits grew together in lockstep.
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The money supply (bank deposits) grew one-third in two years, causing the biggest inflation since World War II.
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There was no oversight from Congress. No one in government was demanding to know what was causing the inflation of the money supply and where the money was going.
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Who received this 4.64 trillion dollars of bank deposits? It wasn't the ordinary citizen or business, buckled down by the pandemic. How much of this money went to the 1% elites?
To give the Fed independence from Congress is to perform suicide on our republic.

How the Monetary System Contributes to the Immigration "Crisis"
by Rita Jacobs, GPMI
There has been a steady decline in birthrates since the economic crash in 2008. In looking back at some information I had saved in 2011, I found interesting my notes from an interview of Senator Lindsey Graham in which he made the following statements: "We're a declining demographic. We will need new workers coming to this country in the out years as the population declines." In 2024 the US birth rate reached a record low.
What I found interesting is that Sen. Graham expected the birth rate to continue its decline. He apparently also expected no improvement in the economy and household wages. and that Congress should plan accordingly. In other words, rather than doing something to fix the economy so Americans can feel economically free to have more children, Graham and most likely other senators planned to import immigrants to replace the loss in population growth caused by the economic collapse.
A report from the Institute on Taxation and Economic Policy (ITEP) points out, "the best evidence suggests that at least 50 percent of undocumented immigrant households currently file income tax returns using Individual Tax Identification Numbers (ITINs), and many who do not file income tax returns still have taxes deducted from their paychecks." American Immigration Council (AIC) analysis of U.S. Census Bureau data points out that most economists say that immigration is good for the U.S. economy because it helps grow the size of the labor force, boost tax revenue, and increase consumer demand. Immigrants contribute substantially to increases in GDP. Immigrants comprise more that 41% of Silicone Valley's labor force, and 46% of Fortune 500 companies have been founded by immigrants or the children of immigrants.
It appears that immigration benefiting the elite in this country is favored. And you ask: "How does this relate to monetary reform?" Economists (or 99% of them) insist that growth in GDP is necessary, and an important indicator of a healthy economy. Unfortunately, most of them have never been taught anything about the monetary system: the system by which new money enters the economy (hint: it's a debt money system). Economists have led most politicians to believe that without economic growth our entire world as we know it would collapse.
Without delving into an explanation of the debt-money system, since it is covered in numerous other articles published in our newsletter, I wish only to point out the reason that we have this decline in birthrate, and why our current administration is attempting to blame immigrants for the economic problems, lands squarely on the effects of our monetary system. Since the system allows the commercial banks to decide where to loan money, and places no restriction on bank officers serving the corporate boards of the same corporations to which money is loaned, the banks are free to benefit the corporations which are most profitable, while profiting from both the interest on any loans paid by the corporations, as well as earning from investments in shares of the same corporations. It's a win-win situation for the bankers. It also provides the methods by which new money is funneled to the wealthiest corporations, and increased profits are distributed to the already wealthiest investors in the corporation. As this process continues, wealth has increasingly funneled new money to the already wealthy. With no limits on political contributions, these corporations contribute large sums toward the election of favored candidates, who will then vote on measures that favor their corporate donors. Eventually, new money funnels directly to those who have the least necessity for more money. Very little of it goes toward those who need it the most.

Bureaucratic vs Autocratic vs the Rest of Us
by Howard Switzer GPTN
The financial bureaucratic state has all but canceled our Constitution, now hanging only by the thread of the 1st and 2nd amendments.
The whole point of our nation's Constitution was to establish We the People as the sovereign, the supreme ruler, accomplished through electing representatives of said people. It was done to get out from under the autocratic rule of monarchy which, in 1694, had already become a financial bureaucracy ruled by a few elites in which most of the important decisions were made by their captured "state officials" rather than by elected representatives. All we got was elected representatives who, for the most part, never represented most people but rather the New York branch of that same financial bureaucracy, when Hamilton, wanting to make sure we became an industrialized nation rather than the agrarian vision of Jefferson, handed our monetary authority to the private banking system. This was the key component of our sovereignty; any nation that does not create its money is ruled by those who do. It is the most vital prerogative of democratic self-governance.
The Big Lie that many believe is that money and debt must go hand in hand. I heard Richard Heinberg say that today. I find it remarkable that intelligent people don't see through that self-serving myth perpetrated by the elite-owned banks who, BTW, create and issue all our money as interest-bearing debt, long known to be a form of slavery since before the Bible. Usury, the abuse of monetary authority for personal gain, is an inconvenient word they did away with leaving only a false definition. MMT's Stephanie Kelton made that argument in her substack recently; have a problem with a word? Well, just get rid of it. So, you don't like debt or deficits? Fine, let's call it our "financial contribution" instead. Problem solved.
Never mind the exponential growth of debt due to compound interest. Counting both public and private debt our nation's debt is $100T while there is only $20T in the nation's money supply. Never mind that the annual interest payment on our $36.5T federal debt is over $1T and what is often overlooked is that 50% of the prices we pay for everything, on average, is accumulated interest paid to the banks. Depending on the goods or services, it can be as high as 70% or as low as 20%, but interest is part of the price.
The Big Lie that money can only be debt ignores the monetary history of the world, which as with any inconvenient history is suppressed and buried and not considered a legitimate field of inquiry by economics departments as it is of a "third order of importance" and thus is not studied and one should not bother writing a thesis on it. As the Sanford Encyclopedia of Philosophy states, there are two competing monetary theories." The Commodity Theory where a commodity is used for money, and the Credit Theory where credit is used for money. Note they list no theory where money is used for money, and yet this was the root of democracy. Money created and issued as money has created broad-based prosperity and bailed out nation's robbed by the banking system on several occasions in history. The last time it was used in the US was to defend the nation from dissolution as the banks would not lend Lincoln the money (credit) to do it except at an exorbitant rate. The European banks feared the new nation would get uppity, so they supported the secession. Lincoln, left with little choice issued debt-free sovereign money called the "Greenback." It was money issued as money, a debt-free asset. Once they were spent into circulation provisioning the war effort, they created a cash economy in which both household and business debt was being eliminated, and interest rates came down as banks competed for deposits. The banks bribed Congress to make them redeemable in gold, hoping to get them out of circulation, but the people found them too useful to do that. More extreme measures were then taken and the Greenbacks eventually ended up as collector's items.
Proposals to have the government issue sovereign money was at the top of the platforms of the progressive populist parties of the late 19th century but the industrialist banks had a firm grip on industry and government by then and passed the Federal Reserve Act, ostensibly to stabilize the economy, which gave them full control of the nation's monetary system. They were soon back to their old tricks and by 1929 caused the Great Depression. That brought forth more proposals for monetary reform which were not adopted. In response to the 2008 banking crisis, Dennis Kucinch introduced the NEED Act in yet another effort to nationalize the monetary system. It was ignored and most people have never heard of it.
Today there are two monetary reform non-profits advocating for the NEED Act in the US and it is included in our Green Party platform. Awareness of Monetary Reform is growing slowly as its abuse reaches devastating proportions. Capitalism is all about war and debt and we have way too much of both. It is time for We the People, the sovereigns of our nation, to rise up against the bureaucratic state and fulfill the Constitutional mandate articulated in the very first sentence of the Preamble.

Issuing Money
by Kevin McCormick GPTX
We may conceptualize the "money power" in three aspects: the creation, issuance, and circulation of money. In this article, I discuss considerations pertinent to the issuance of money.
The Green Party platform plank titled Greening the Dollar calls for three fundamental changes to the United States monetary system:
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Nationalize the 12 Federal Reserve Banks and transfer administrative functions . . . to a Bureau of the U.S. Treasury. . . . The private creation of money will cease . . . .
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All new money will be issued as a debt-free, permanently circulating asset by the federal government. A new Public Monetary Authority will be established . . . to avoid inflation or deflation. . . . [refer to] H.R. 2990 112th Congress: National Emergency Employment Defense Act of 2011 (NEED Act).
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All new money will be spent into circulation by the U.S. Government as authorized by Congress for public purpose. . . . Newly-created money will also be distributed directly to state and local governments.
It must be remembered that Congress has the power to create and issue money and the power to prevent anyone else from doing so. The U. S. Constitution, Article 1, Section 8, provides: "The Congress shall have Power . . . To coin Money, regulate the Value thereof, and of foreign coin, and fix the Standard of Weights and Measures; . . ." Congress also has power "To provide for the Punishment of counterfeiting the Securities and current Coin of the United States; . . ."
The third point of Greening the Dollar refers to issuance of money saying it will be "spent into circulation," which is described with more detail in the NEED Act, Section 201, which calls for the Treasury to disburse United States Money to pay for federal appropriations, matured treasury debt, additions to the Revolving Fund, and other federal payments, including direct disbursements to the states.
The NEED Act is intended to accomplish a mostly seamless transition from the private Federal Reserve system to a public sovereign money system. Amounts in existing bank accounts are unchanged and cash withdrawals would be in United States Money. This replacement issuance would simply maintain the status quo.
While the payments and bank deposit system is largely unchanged, there are important changes to the credit system in the NEED Act. Banks are required to remit loan principal payments to the Revolving Fund instead of simply subtracting the amount from loan balances in their accounting system. For new loans, banks may acquire the loan principal from the Revolving Fund and return the principal payments to the fund. Banks are prohibited from inflating the money supply by creating deposits with new loans. Bank credit is an important avenue of money issuance and accessing the Revolving Fund for loan principal will provide (possibly more than) ample credit, with issuance being limited by bank credit standards. The requirement of returning principal to the Revolving Fund will also likely reduce speculative lending and the appeal of maintaining insolvent borrowers with additional loans.
The NEED Act provides for issuance of United States Money to pay for federal appropriations as needed, such as when appropriations exceed federal tax revenues. Proponents of the NEED Act are hopeful that Congress will appropriate funds for beneficial purposes instead of imperial warfare and corporate and fossil fuel subsidies, but I make no attempt to predict whether Congressional appropriations will become more progressive and public interest oriented. If, indeed, programs such as medicare for all, low cost college education, and modern infrastructure are funded, the economic benefits would flow through the economy, improving working and middle class economics.
The issuance of money is a process that is intensely political, with great advantages going to those with priority in the distribution process. The possession of money represents economic potential, which readily translates to economic and political power. For example, access to banking cartel credit enables Wall Street speculators to amass huge real estate portfolios. As another example, the provision of unemployment benefits during the Covid pandemic enabled many working class people to reduce debt and improve their financial circumstances.
Because the issuance of money is so intensely political, it is my opinion that the single most important objective for money issuance policies should be basic fairness to all members of society. We should avoid the economic class and ideological bias of the Federal Reserve system which favors the already wealthy, loans backed by inflating asset values, and wasteful consumption of resources. Instead, money should be issued so as to assure that all members of society have reasonable access to sufficient money to participate in the economy and, as the Constitution states, secure the blessings of liberty.
The Federal Reserve system confers ubiquitous and dominating economic and political power to the banking cartel through their control over the creation and issuance of money. The Federal Reserve system today uses interest rates set by the Federal Reserve Open Market Committee to moderate the amount of money created by the banking cartel. The banking cartel creates deposits and effectively issues money through mortgage loans, auto loans, student loans, credit card loans, corporate bonds, and loans to governments. The interest rate manipulations constitutes monetary policy under the Federal Reserve system and are meant to influence the amount of lending and deposit creation.
Under the NEED Act, monetary policy would address different concerns. A prime concern would be stability, or the prevention of inflation or deflation, and would likely be addressed through tax policies that removed and redistributed money. Avoiding over-issuance of money is a very important requirement which may be rather difficult due to the inflationary issuance under the Federal Reserve system. Economic development through government supported programs to develop new technologies and programs such as parity pricing for agriculture would provide a basis for an improved level of well-being without the requirement of inflation that characterizes the Federal Reserve system.
The contrast between the NEED Act monetary system and the Federal Reserve system goes beyond the methods of directly issuing money. The Federal Reserve system requires monetary inflation and government debt in order to maintain loan payment flows and financial securities markets. The NEED Act, on the other hand, presents the possibility that money issuance could be designed to improve society and the environment and also reduce the costs of business and commerce while maintaining wages, thus improving living standards without inflation.
It is apparent that the topic of money issuance under the NEED Act is broad and complicated, with numerous economic and political considerations. Hopefully, this brief article has raised some of the aspects of the topic and will lead people to view money creation and issuance as a key consideration in politics and government.

To allow money to become a source of revenue to private issuers is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough ultimately to overthrow all other forms of government.
– Frederick Soddy
- Our current monetary system is institutionalized usury.
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- Usury:
- The abuse of monetary authority for personal gain.
- The great religions and philosophers condemned usury.
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Dante described it as
An extraordinarily efficient form of violence by which one does the most damage with the least amount of effort.