I have written this article because the average American is, according to the most recent poll, by a leading national publication, economically illiterate. Adults earned an average score of 57% while HS students managed a 48% on a test in economics and money. In any event almost everyone got an F. Most American HS schools do not require economics or political science to graduate. All students are adroit however in putting condoms on bananas.

Smoke and mirrors are the stuff of historic information, which constitute most written information about the great depression of 1929 to 41. Intellectual historians, and by that I mean people who make their living in the field of history, all bring their political and social bias to the discussion. They turn and manipulate events to ensure the reported outcome favoring their pet philosophy of economics. We should all understand that the great majority of historians in the various brain laundries of education are either socialists or communists, and through this have an ulterior motive in turning fact into fiction.

As most readers will be unfamiliar with the magnitude of that event let us first understand what actually took place. During the four years of 1929 to 1933, American national production in all sectors of the economy fell by more than half. Americans real disposable (after tax) income fell by 28 percent. Stock prices (the value of stock shares) fell ninety percent, i.e. shares were reduced in value to ten percent of the purchase price. Unemployment rose from 1.6 million in '29 to 12.8 million in '33. One of every four workers was unemployed; there were no job openings. Industry was at virtual stand still, and daily business bankruptcies were a normal fact of life. This was the longest and most devastating economic depression in modern history.

Myths of the cause of this catastrophe never seem to go away; they just keep re-appearing in school textbooks, and political science courses. The perpetuators of these false theories inform that there were two reasons for the depression; first was the unrestricted free market, and second was the protectionist trade policies instituted by Herbert Hoover who was then president. Both of these theories are wrong, not based on the facts, and designed to have the reader accept these ideas in order to sell them their socialist utopian rubbish.

Before we proceed let the reader learn that this was not the first depression in America, and that like all the previous ones it was caused not by trade, or the free market but by banking in league with government. Also understand that the terms "free market" and "free trade" are completely different animals. Free market refers to a domestic market unhampered by government interference; America has not had a free market since prior to the presidency of Andrew Jackson. Free trade is a relatively new, and impossible concept, based in the fanciful idea that all markets worldwide should function unrestricted by duties and tariffs. This idea is not only utopian it is stupid. We have instead government-managed trade. The economic variances between nations in income, regulation, infrastructure, language, education, skill, raw material availability, as well as social structure make it so. This is the reason why the very same people who perpetuate the lies about the depression are now actively pushing for the EC. NAFTA, WTO, GAT, FTAA, and other international agreements and treaties, because they have come to realize that free trade only works on a level playing field. These treaties and accords are therefore designed to lower the standards in developed nations and to increase standards (at the expense of the developed) in the under developed countries.

A basic understanding of economics is a prerequisite to your understanding of the to be explained coming events. The first and most basic method of commerce is called barter. It is a process still in use today; it consist of one person trading with another person of different goods which both agree have equal value. Today this as well as unrecorded cash transaction is a principal method used by people to avoid our confiscatory tax structure. This is the reasonable outcome of a system that taxes its citizens at an average rate of 49.20%. Referred to by government economists as the hidden economy, they claim that it exceeds $ 100 billion per year. The labor department when reporting American unemployment decreases the roll of the employed by 38,000 per month, which they claim to be the increase of workers in the underground economy. Called the Plug Factor, it is just one of the ways unemployment numbers is falsified.

Real money, something most readers have only a passing recollection of is the use of a substance in most cases a metal as a medium of exchange. Gold, silver and Bronze coin has been used since antiquity as this medium. In America it was commonly used until 1933 when the gold standard was abolished. Then silver certificates and gold certificates; i.e. paper money redeemable in metal was eliminated. And last silver coins were eliminated. There is but one and only one reason for government to eliminate hard currency; it is to allow them to inflate (reduce) the value of money. A silver dollar worth one dollar in 1960 is now worth (silver value only) $5. This means that over a term of 40 years the currency has been debauched 20 percent per year. Thus the government and banking interests that control it can report to you that you are better off than you have ever been (a outright lie) because you are earning more. In real terms, actual value of currency (buying power) average income has fallen every year since the depression recovery of the Second World War. The reason that FDR was so desperate to get into WWII is not his hatred of Germans (he was _ Jewish) it was for the purpose of bringing America out of the depression by war.

"Funny money", is what I call fiat money. It is paper backed by the good faith and trust of Uncle Sam. How about that for a whopper! The paper money issued by our government today is in fact backed by nothing, and as we shall see government does not issue it. All the newly issued currency does not even have the backing of a bank. Up until 1997 a Federal Reserve Bank issued all fiat bills. Beginning in 1998 new bills were issued by the FRS [Federal Reserve System] Please understand that this is not a bank, it is not a reserve, it is not a system. It is a private corporation, and it issues all American currency. By 2000 the single dollar bill will be well on the way to elimination and the FRS will issue all other paper money. If you don't believe this look at a one-dollar bill, at the left of Washington's picture is a black seal; it states Federal Reserve Bank of: Atlanta Georgia, or any one of the twelve Federal Reserve banks. On the new bills $5 $10 $20, $50, $ 100, it says Federal Reserve System. This then is fiat money, money without value in kind, or any backing its just paper.

Just one more thing before we go on. Inflation! And the false reporting on it by all government agencies. Inflation, when there was real money was the debasement of coin by reducing it in weight, or by alloying it with base metals. This was a common practice in Roman times by emperors who had overspent. Inflation is much simpler with paper money, you don't have to change a thing, and it is not immediately apparent. All governments inflate currency, but ours has excelled at it in the last 50 years. A good way to gauge inflation is to compare your currency to others. In 1950 the Swiss Frank was valued at Sfr. 4.80 per dollar. Today it is at Sfr. 1.and change per dollar. This demonstrates about a 350% decrease in the value of the dollar compared to the Swiss Frank, which by the way was also inflated but at a much slower rate. Inflation is a method by which governments increase your taxes without telling you, and banks increase profits at your expense. The cause of inflation is always and only government. The private sector is not able to cause inflation. Government informs us that the rate if inflation over the last 50 years has fluctuated between 3% and 12%, if we now accept the lower figure and add it we come up with 150%. Without even compounding it, we can thus see that the value of the paper money (fiat species) has been continuously debauched by government since 1933.

Depressions, inflation, fiat money are nothing less than the result of governments and bankers control of the nations economy. There have been numerous undertakings to accomplish this in America.

The First attempt to control America's finances was in 1816. It was the United States Bank, a private corporation; its capitalization was $ 35 millions. This may seem a paltry sum, but believe me it was a great deal of money in 1816. The bank obtained a charter from congress (in violation of the constitution Art. I Sect. 2 Para.5) giving it a monopoly in the issuance of currency as well as notes receivable by the United States government. In fact this was exactly the same as what the FRS has today. Not only that but congress actually guaranteed solvency. (Congress underwrote any possible debt) Money issued by this bank, although legal tender, was not acceptable for the payment of import duties, which was the only method of direct federal taxation at the time, and remains today as the only constitutionally legal form of federal taxation. The government only accepted gold and silver. For the monopolistic guarantee granted by congress to the bank, it was obligated to pay the government the paltry sum of $ 200,000 per year for their charter. Consider that they had a monopoly on 1) issuing currency 2) collecting debt, 3) collecting duties, and fees owed the government in gold 4) setting interest rates 5) collecting interest on any outstanding debt. $200,000 was a paltry sum to pay for such a franchise. In 1828 Andrew Jackson the last president with the guts to stand up against the bankers refused to re-instate the banks charter. The bankers promptly set the first American depression into action. Biddle the president of the bank, characteristic of the profession pulled all the stops and virtually destroyed the American economy. He called every outstanding loan, he had loaned millions to senators and congressmen as well as newspaper publishers and editors, he called them all. Jackson vetoed every congressional attempt to re-charter the bank. It was 1837 before economic health was restored. Andrew Jackson showed in black and white that the bank with a fixed capital value of $ 28 million had valued it's stock at $ 45 million and provided loans outstanding at $ 500 million. For which they paid the government $ 200,000. Per anum. Interest just on the outstanding $ 500 million was at a 4% compounded-rate over $ 23.2 million per year, all of which was profit for the bankers.

Similar actions by banks in the 19th century included the banking panics (depressions) of 1833.1837, and 1840. These all helped banking interests to consolidate banking by reducing the numbers of banks and by developing a system of central bank controls over them. This is not un-similar to the 1997-98 Savings & Loan scandals that served to consolidate central banking control by reducing the number of independent banks in America by just over 800 banks. (All financed by you the taxpayer) Meanwhile just as today banks were merging, and buying out competitors, it must be said however not at the lightning speed of the nineties. There are several banks operating today whose asset base is larger than 90% of the world's national economies. Even with all this the American economy grew at an astounding pace until the civil war.

The second attempt took place in 1860. At that time there were two different banks in existence, State Banks and National Banks. Both had the right to issue currency, and both were very loosely regulated. The National banks had a plan, which they were able through bribery of numerous congressmen and senators to bring to fruition. This plan was simply to eliminate their competition the State Banks, and to consolidate their assets in the National system. They accomplished this with the able help of their man in the senate Sherman who on the 13th of February 1862 introduced the National Banking Act. This odious legislation gave the National banks special standing before the law. It placed them in position to bring legal action in any court "of original jurisdiction" (now called federal courts) something no other bank was allowed to do. This finished the State Banks because it isolated National banks from legal action against them for any reason from Sate Banks. Furthermore it doubled the net asset value of all national Banks. In actual legal terms it:

1. Allowed them to issue bonds to raise capital to secure the circulation of money they printed, and guaranteed payment of interest in gold.
2. The circulated notes issued by the banks were promissory notes payable on demand, and were allowed to be used as collateral for further loans.
3. They were granted the right to loan out up to 90% of their asset value.
4. Loans by the government (what we now call treasury notes) were discounted up front at twenty percent, allowing unbelievable up front profits, without risk.

All this made currencies (money, bank notes) issued by these banks in competition with the "Green backs" issued by the government, and thus placed all financial interests in the hands of private banks. This was the cause of the eventual next depression.

Now it is necessary for you to understand that the Civil War [War of Northern Aggression] contrary to what you have been taught had little to do with slavery. It is a fact that slavery was only brought to the table after Lincoln was unable to successfully implement his economic programs on the Southern States. Books like Uncle Toms Cabin written by a New Englander who had never once been south of the Mason-Dixon line, and had nothing to do with the actual facts, helped inflame the public into a war. Banking and economics was the root cause of the war. The southern states purchased the majority of their industrial goods from England for three good reasons: 1) the price was lower and 2) the quality was better 3) England was the south's largest customer. The rapidly expanding Northern industrial manufacturing interests were losing what little portion of the Southern agrarian market that they had. Clearly they wanted to force the farmers in the south to buy from them. Having a plurality in congress they were able to pass restrictive tariffs thus increasing the cost of imports and making Yankee products more cost appealing. When that did not work they placed a naval blockade against the Southern States. The South had little option but to secede from the union in order to protect their primary sales market England. August Belmont & Co. of New York, were the American Agents for the Rothschild banking interests of London, Frankfurt, Berlin, and Vienna. They advised Belmont to immediately cease purchasing any American paper. Thus cutting of the largest supply of money in the world at that time from the North, and by it stifling northern industrial capital. As proof of the foregoing text I offer a paragraph of a letter widely in circulation, just prior to the civil war, who's origin is traceable to the Rothschild banking interests. "Slavery is likely to be abolished as it has been everywhere, and thus chattel slavery will be destroyed. This European friends and we are in favor of, for slavery is but owing labor, and thereby carries with it the care and sustenance of the laborer. In our new European plan, led by England, the capital control of labor is through wages, and control of the currency." Hi there fellow slave! Financing of the war had thus to be done internally, through the issuance of treasury notes. $ 150,000,000 of these was issued at the beginning of hostilities. An astounding sum for that time. This was accomplished through the same New York bankers who later under the FRS were to own 27.2% of the Fed. [Now expanded to over 53% by NYC banks alone] The notes were discounted to the banks at 20% allowing the New York banks an up front profit of $ 30 millions. Lincoln then issued his "Greenbacks" so called because they used green ink rather than back. The bankers were unhappy with this and eventually had Lincoln assassinated by Booth. The evidence of this is a coded message found in Booth's pocket at the time of his arrest, which was only de-coded in the 50ies.

The final product with which we now live is the FRS [Federal Reserve System], which is a private banking consortium that is not federal, has no reserves, and is not a system but a corporation. Legally a corporation is exactly as a person before the law. Thus the financial responsibility of a corporation cannot extend beyond the corporation, and unless fraud is proven does not extend to the stockholders, or the directors. It is clearly important that you understand this most important point, i.e. under statute (law) the FRS as a private corporation is not responsible and cannot be held accountable for the value of or the backing of the dollar. The Federal Reserve Act that established the FRS was passed by congress (again in violation of the constitution) in 1913. Incidentally, that very same year that they past the 16th amendment the Internal Revenue Act. As of that time the IRS has been the collection agent for the bankers who are the owners of the FRS. Unlike most banks in independent nations it is not a government bank. The FRS is a private monopoly consisting of 12 FRS banks with a total of 37 branch operations. The power of the bank rests with its New York members, which account for 53% of the total ownership. Sure you can say that the Governor (head) of the FRS is appointed by the president, he is given a short list of members of the board members from which he can choose one. Presidential impute even if in office for eight years is minimal because board appointments are for 14 years. What is the power of the Fed?

- Conduct the nations monitory policy.
- Regulate interest rates.
- Approve credit. (To banks)
- Supervise all banking
- Regulate all credit. (FRR Federal Reserve Regulations)
- Regulate markets.
- Regulate American and foreign banking operating on American soil.
- Loan money to the nation, the public, and banks.
- Operate the national payment system.

Furthermore the FRS manages the following:
- FDIC [Federal Deposit Insurance Corporation]
- NCUA [National Credit Union Administration]
- OCC [Office of the Comptroller of the Currency]
- OTS [Office of Thrift Supervision]

The FRS has never been audited by any branch of the government!

The FRS had been in control of our economy for 16 years when the "Great Depression" took place. We need not look any further to place blame.

Let's for a short time jump into the 20th century. Constitutionally the only legal currency that can be issued is by congress; furthermore that currency must be in coin, i.e. gold or silver. Constitution Art. I Sec. 8 Para.5. On taxation the Constitution is likewise very clear Art. I Sec. 8 Para. 1 Congress is allowed to tax, but only on duties, excise, and imports. And only congress may borrow money. Obviously the reading skill of our congress has not improved since 1850, in fact it has become worse. The 16th amendment to the constitution (the income tax) was never legally ratified by the States, or by the required plurality in congress, and therefor just like NAFTA remains outside the law. This is about the depression and we can have a brief look at some similarities of the '29 depression and the present. In 1929 the average stock share was overvalued at 19 times earnings, in fall of 1999 the average share of stock is overvalued at 29 times earnings. In 1929 the greatest Ponzi scheme was something called Investment Trusts, they in fact are almost identical to Mutual Funds now such a common vehicle of investment. Once more, in replication of the 19twenties mutual funds are allowed to borrow using their portfolio asset as collateral, just as investment trusts were also. [They borrow money from banks using your portfolio investment (your money) as collateral for loans] This was the factor that caused to investment trusts to collapse. In 1980 America was the largest creditor nation in the world by 1990 we were the largest debtor, a national debt which continues to explode. 1991-92 saw the largest recession since '29. California went bankrupt. At the turn of the century the NASDAQ fell by 50%. From 1990 to 98 1.44 million American families declared personal bankruptcy, and in 1998 more personal bankruptcies were reported than in 1929. The money supply form 1927 to 29 was being expanded at exponential speed, the Fed. Has been expanding the money supply at a rate of over double that in the twenties. In fact Allen Greenspan was involved with Ayn Rand in writing Capitalism the unknown Ideal in the 19twenties. On page 99 we find the following sentence written by Greenspan, who is now the FRS governor, "The United States underwent a mild contraction (depression beginning) in 1927. The Fed. (FRS) created more reserves (expanded the money supply by giving banks more credit) in the hopes of forestalling any possible bank shortageIn anticipation of possible runs on banks due to the Y2K problem the Fed has just increased the money supply to it's branch operations by just over 30%. This is on top of an already massive increase in money supply to keep the bubble economy going. Without any exaggeration the present economic situation is substantially worse than in 1929.

To re-cap there had been depressions in America in 1819,1836-37, 1857, 1873, 1893-95, and then the largest in 1921. The common thread winding through all of these was government interference in the economy through the banking system. The massive manipulation of the money supply. Just like today, government in order to stay in political power adopted policies, which ballooned the money supply, thus creating a bubble economy. The day of reckoning for such policy must always come, and it in every instance results in a depression. Ever since the twenties the bankers in charge of our economic and political life have strained to become not just the controllers of our economic life but also to develop a world that they totally control. The greatest authority on this issue was Professor Carroll Quigley (CFR*) Bill Clinton's mentor, of Georgetown University. He wrote a book Tragedy and Hope over 1000 pages as well as The Anglo American Establishment, outlining the exact hopes and plans of the banking community. In it we find the following sentences: "Our aim is nothing less than to create a world system of financial control in private hands to dominate the political system of each country, and the world economy as a whole. Freedom and Choice will be controlled within very narrow alternatives"
It's not really necessary to add anything to that, it says it all.

Contrary to what you have been told the Smoot-Hartley act of tariffs did not cause the depression. Hoover who was the president at the time was a well-known front man for big banking interests. The academic none-sense goes that: Smoot-Hartley that was American protectionism caused other nations in retaliation to increase tariffs and thus brought on an international depression. Rubbish. At the time Americas total exports amounted to less the 5% of our industrial production. A 5% reduction in sales, and that assumes a total stoppage of all exports, which did not happen, would not cause a 50% reduction in manufacturing output.

Just as in the 1990ies the period between 1930-33 saw the closing of over 9000 small banks. During the recent S & L debacle of the 90ies we closed just as in the depression 800 small banks. And exactly as in the depression the taxpayers wound up paying the bill. All this is for the consolidation of banking into several mega international banks, which will be of sufficient size to dictate terms to governments. Terms like: The Panama Canal Treaty, The Mexican, Russian, Brazilian, Korean, and Indonesian bailouts. All paid for by 18% U.S. taxpayers and the balance by the taxpayers of the industrialized nations. When we speak of taxpayers we speak of the middle class that pays over 85% of all taxes.

While all this was taking place in 1929 the captains of the finical markets had already in anticipation of the depression converted most assets to cash, gold, having sold most of their stocks, Joseph Kennedy, Bernard Baruch, and Rockefeller among them. When the market finally tanked they jumped in and bought, bought, & bought. That was then eventually the cornerstone of their great fortunes in the coming decades.

The Modus Oparandi of these people can be clearly seen from actions taken by J. Kennedy and FDR when Kennedy was the Ambassador at Earls Court in England at the outset of WWII. Churchill as he came to be prime Minister saw that England was bankrupted by the war. They had just lost at Dunkirk. He came to Roosevelt and requested American financial help. FDR told him to go to hell. He said English citizens own millions in stocks of American companies, and suggested that the British government purchase those stocks to be sold on the NY markets, as a means of financing the British war effort. This was carried out. Kennedy obtained a list of all the stocks, and had his NY agent short every one of them the week before they were all dumped on the American market in one bundle. This was the basis for the Kennedy fortune. What if any percentage of the profit was offered to FDR I am not privy to. We call that insider trading; it is a crime punishable by fine and imprisonment.

The great lie perpetuated by academicians is that the depression was caused by projectionist international trade policies. There is a good reason for this lie; it allows them to persuade us to accept their slogan "Free Trade". This is the exact propaganda slogan that is the root cause of Americas declining manufacturing sector and perpetual trade deficit. Since the CFR inspired free trade slogan we have as a nation lost over 7 million well paying manufacturing jobs, replacing them with lower paying service sector jobs. Anyone who tells you that we are in a new age, the service sector or the information technology age is a liar. Can you build a house, car, boat or anything else out of information or service? To add to this we must add our new Mexican NAFTA partner. The facts relating to NAFTA, which is the economically worst deal America has entered into in its history are as follows.

·Before NAFTA America had a $6 billion annual trade surplus with Mexico
·Since NAFTA that has grown to a $ 26 billion deficit.
·American Manufacturers have built $ 2 billion in new plant per year in Mexico
·Marquilladoro manufacturing shipments to Mexico are counted as exports; when they are re-imported they are not statistically recorded
·Third nation imports for Marquilladoro manufacture are not reported upon re-importation to the USA
·America has lost 3 million direct manufacturing jobs to Mexico and 4 million in new plants built by American companies in Mexico.
·New plants built by American manufacturers employ an additional 4 million Mexicans
·Total manufacturing job losses due to NAFTA by America is 7 million
·Total trade losses due to NAFTA are $ 33 billion per year
·EO illegally enacted NAFTA in 1992 since then we have lost $ 297 billion in trade.

Even without NAFTA America has sustained an unrelenting trade deficit every single quarter for the eleven years. Everyone can well understand that if you spend more than you take in you will eventually be bankrupt.

Business, at least in the short run does not benefit by having to move production lines off shore. So if neither labor nor management, nor business benefit, we are left with finance. Banks make a profit every time goods are moved, banks make a profit every time good cross a national boundary, banks make a profit every time someone issues or collect on a letter of credit, banks are the only net gainers in the free trade scenario. As stated previously the free market had nothing to do with the depression. The government and banking interests were, and are the culprits. The reason that the free market is blamed is that most academicians (college professors), who expound on this topic, are socialists. They thus develop the tendency to blame everything not in line with their beliefs on the free market. Let me make it perfectly clear business is not able to inflate (de-value) money; only the issuer of the money is able to accomplish this by printing more of it. Business is not able to accumulate trade deficits, business is only able to produce, government makes regulations on trade, and thus it is government and government alone that dictate trade deficits or surplus. Often we hear news reports admonishing us that prices have risen and that due to this we have inflation. This is wrong; the cause for the inflation (the rise in prices) that is measured by rising costs is a by-product of government policy. Socialists will never admit to that, because it proves that socialism is the root cause of poor economic performance. America's economy is not free. I stated this earlier.

Hoover pouring gasoline on the fire embarked on a policy of stabilizing wages at insupportably high levels, thus causing higher unemployment. Then he drastically increased government spending from 16.4% of GNP [Gross National Product] (the total of what an economy produces) to 21.5%. Not to be outdone along came FDR (Franklin Deleno Roosevelt) our first true socialist president who instituted the "New Deal" a disaster we are still trying to do away with. It brought many of our Ponzi schemes like Social Security. He devalued the dollar by 40%. He seized peoples gold holdings. Then he fixed the price of gold. One morning, according to Morgenthau Sec. of Treasury he increased the price of gold by 21% because he thought that 21 were a lucky number. He destroyed the London Economic Conference of 1933, which would have ended the depression, and probably have prevented the Second World War. In the first year of his administration he proposed spending $ 10 billion when the nation had an income of $ 3 billion. He expanded government expenditures by 83%, while skyrocketing the federal debt by 73%. He then went on to increase taxes (income by 5%) then again in 1934. By the time he had been in office for ten years he had increased the top income tax rate to 91%. The only visible success was a gradual but slow reduction in unemployment a good portion due to WPA [a government jobs program like Americorps]. None of it saved the economy. The re-arming of the American military for the Second World War ended the great depression in 1941.

The single stupidest achievement by the FDR administration with the able cooperation of the congress was the Wagner act. [Sometimes referred to as the National Labor Relations Act]. This law took labor disputes out of the courts and created the National Labor Relations Board [NLRB]. This was jury, judge, and prosecutor and defense attorney all rolled into one. The NLRB was staffed as it is to this day with left wing union supporters. No employer has ever had a fair shake from this outfit. In the thirties they went on a frenzy of union organizing, extortion, blackmail, and intimidation. This created a very unfriendly business environment, and thus extended the depression until 1941. At the beginning of the Second World War over 12 million Americans remained jobless.

14 About the author:
Dr. Adrian Krieg was educated in Europe, America and Mexico. He holds 25 U.S. Manufacturing patents. All Secretaries of Commerce from Malcolm Baldridge on to Ron Brown appointed him the CT & RI District Export Council. His doctorate is in Manufacturing Science. He was the passed CEO of a small multi national corporation. Publishing credits include over 100 articles, and a number of books, the latest of which is
Our Political Systems. To come out in Spring 2001) For more info: www.kriegbooks.com

* CFR [Council on Foreign Relations] (NYC) an organization related to the RIIA [Royal Institute on International Affairs] (London) TC [Trilateral Commission] and the Bilderbergers.

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