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Occupy Liberty Street (OLS)! (The Federal Reserve Bank of New York)

Gary North
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Oct. 21, 2011

The phrase "Wall Street" is a representative of the financial community. The only sensible reason for occupying Wall Street is for symbolic purposes. You want to call the public's attention to the problem.

What is the problem? I contend that the people occupying Wall Street do not understand the problem. If they did, they would be forming picket lines in front of the New York Federal Reserve Bank at 33 Liberty Street. That is where the problem began in 1914. That is where the problem will be solved.

The less well informed will form picket lines in front of the representative agency of the Federal Reserve Bank of New York, namely, the Federal Reserve Bank building in Washington, D.C.

The power has never resided there. That is a symbol to deceive the Congress of the United States, which operates under the illusion that it is in charge of the Federal Reserve System because it is nominally in charge of the Board of Governors of the FED, an agency with national sovereignty.

The symbol of this sovereignty is the suffix to its URL: The "gov" ID is the mark of sovereignty.

The New York FED is where the decisions are made. Its URL suffix is ".org." That is the mark of its legal incorporation as a private entity.

What is Wall Street? It is a street sign. It is a building. It is the headquarters of the New York Stock Exchange. Outside of the building is a sculptured bull.

In front of the bull these days are picketers. They are making a point. They don't like the financial system. They think that the central core of the financial system is on Wall Street. It isn't.

To understand how the system really operates, imagine that you are at a bull fight.

The matador is a conglomerate of very large banks. Today, there are four of them. They hold about 57% of the banking system's assets.

Who is the bull? Stock market investors. Bond investors. Rich people who think Wall Street is the road to Easy Street.

From time to time over the last 200 years or so, beginning in 1819, this conglomerate has pushed the American economy into a series of booms and busts. The first major bust was in 1819.

The matador has been politically vulnerable on many occasions. It was vulnerable for a decade, 1929 to 1939. The bull got its horns into the matador a few times, not by demonstrations on Wall Street but in the halls of Congress. The government has imposed lots of rules and regulations after every stock market crash. As Dr. Phil asks his guests from time to time, after they have described how they have dealt with some terrible relationship issue: "How's that working for you?"

In the good old days -- pre-Eisenhower -- the head honcho at the FED was the president of the New York FED. The last visibly powerful New York FED president was Beardsley Ruml, who was also the head of Macy's. Ruml was rich, and powerful beyond belief. Wikipedia describes him well.

From 1922-29 he directed the fellowship program of the Laura Spelman Rockefeller Memorial Fund, focusing on support for quantitative social and behavioral science. He was an advisor to President Herbert Hoover especially on farm issues. In 1931 he became dean of the Division of Social Sciences at the University of Chicago--a center for quantitative research. He was not popular with the faculty and in 1934 Ruml became an executive of R. H. Macy & Company, parent company of the department store, rising to chairman in 1945. He also served as a director of the New York Federal Reserve Bank (1937-1947), and was its chairman from 1941 until 1946; he was active at the Bretton Woods Conference (1944) that established the international monetary system.

It was Ruml who persuaded the government to impose withholding taxes in 1943, the greatest expansion of revenue since 1914 -- the income tax's first year. Ruml was the real deal.

A few years after Ruml retired, the spotlight shifted to William McChesney Martin, who was Chairman of the Board of Governors. Martin remained in Washington. From then on, the Chairmen of the Board of Governors have received whatever public attention that the FED receives -- as little as the FED can control. That suits the powers behind the throne just fine.

Matadors need assistants to help them kill the bull. The main one is the person who supplies the sword. Who is the sword-maker today? The Federal Open Market Committee (FOMC). It votes to establish monetary policy. It acts on behalf of the largest banks.

Then there are the picadors. They stick barbed lances into the bull's shoulders. This weakens it by bleeding it. These are the stock brokers.

"Wall Street" is not where the power is. The New York Stock Exchange is arena where the matador and the bulls perform. The bulls are the poor little rich boys and girls who think that they will get richer by turning their money over to stock brokers.

This is the bull fight that really matters. This is the arena in which money is separated from the rubes. This is where the biggest banks make their money. Use Google to up the word "derivatives."

The Occupy Wall Street crowd usually gathers outside the arena. They dream of getting inside someday. They want to be part of the crowd that is inside, cheering. They dream of safe, comfortable retirements. They dream of government jobs. They dream of Easy Street by way of Wall Street. But they do not have the money to get inside the arena. Most of them never will.

Day by day, headline by headline, official government report by official government report, the matador waves his red flag and makes gestures that lure bulls into the trap.

A bull is anyone with money in the stock market. The banks care nothing about the demonstrators outside the New York Stock Exchange. That is not where the money is. That is where the money is extracted.

The bulls keep handing over their money to stock brokers. The Dow Jones Industrial Average was at 11,723 on January 14, 2000. It closed at 11,809 today. In between, the dollar depreciated by over 30%.

The poor souls demonstrating in front of the New York Stock Exchange have never been told that the source of the sword that the matador wields resides at 33 Liberty Street. That is where most of the world's gold is stored. That is where the gold belonging to the United States government -- officially speaking -- is supposed to be stored. It is stored by the senior agency of the banking cartel: a privately owned facility.

Congress will not audit the FED. It will not audit the gold. Yet Congress is officially sovereign, just as the government's gold at 33 Liberty Street officially belongs to the government.

If you want to know how the system works, follow the money -- the real money. Find out where the gold is. Find out who owns it. Find out who can buy it legally. Find out if it has been leased. That is where operational sovereignty resides.

Occupy Wall Street is a side show for the people who will never see their money extracted by the big banks. The rich schnooks who hand money over to stock brokers -- to Wall Street -- are the bulls in this national sport. They will feel the sword. Like any bull that gets replaced for the next grand show, they will never know what kills them.


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