The Federal Reserve Cyst
by James Jaeger

A Creature Eating the Land

The Federal Reserve is a government-sanctioned, quasi-private, banking cartel established in 1913. Its main architect was Paul M. Warburg, who was a partner with Kuhn, Lobe & Company representing the Rothschilds and Warburgs in Europe.

Today the Federal Reserve is in collusion with the United States federal government (which ultimately guarantees its loans by the sweat of you, the American taxpayer), because the government is addicted to the fiat, debt-backed, currency it creates out of nothing for its big government spending and continual warfare projects, from the Federal Reserve System.

Debacles which have been guaranteed in this fashion over the years, which you have paid for, are the following:

Penn Central - a $125 million bailout in 1970.

Lockheed - a $250 million bailout in 1970.

New York City - a $2.3 billion bailout in 1975.

Chrysler - a $1.5 billion bailout in 1978.

Commonwealth Bank of Detroit - a $60 million bailout in 1972.

First Pennsylvania Bank of Philadelphia - a $500 million bailout in 1979.

Chicago's Continental Illinois - a $4.5 billion bailout in 1982.

When you stop to consider that about 50% of the American people are employed by the government at either the federal, state or local level, a dooms day machine is being put into place. Put simply, if a government has the ability to legally order a banking system to covertly or overtly create fiat money, and that government gets first dibs on all or part of that money being put into circulation, this is like a drug addition, because once a majority of the people are employed by this system, they will defend it even if it is an insane system or an unconstitutional system.

This is the state of affairs we are headed into right this second.

Early as 1962, many genius-visionaries, such as L. Ron Hubbard, considered black sheep by the mainstream, first began warning us about the FED, and the War System operated under the "Rothschilds Formula" as coined by G. Edward Griffin in 1994. Today, due to the mass communication revolution, millions of people, (many authors, producers, scientists, sociologists, entertainers and their agents), are finally becoming aware of these machinations and their anatomy.

Much of this is due to the Internet, to the horror of the CFR and other front groups of the Round Table who want to socialize the planet under a One-World, totalitarian government. This is why you will see on the cover of Time Magazine (a CFR-ridden mag) a little child with the caption reading to the effect: "Does the Internet make pornography available to your child?"

They are trying to get control of the wild frontier of this new communication technology so they can further subjugate your freedom. And the best way to do this is use the usual means they use:

1. Alarm you with real or imagined danger.

2. Promote crime so the real or imagined crime rate seems high enough for them to justify stepping in to "protect" you with more policing techniques.

Remember, the IDEAL SCENE of the CFR and any International Banking Regime influenced by the Federal Reserve and/or the Rothschild Formula is the following:

"Have assigned to (or stamped on) the physical body of every human being ("High-tech Feudal Worker") at least two (2) cross-referencing forms of identity (i.e., a "name" and a "number") which can be computer tied into such Feudal Worker's money accounts one way or another".

Think about it. If some entity has complete control over your identity and your energy (read money), can they not deprive you of your rights and freedom with or without due cause?

Question: Why do you think our founding fathers left Europe and started America under a new Constitution several centuries ago? Answer: because they were being deprived of their rights and freedom with or without due cause?

So let's not be stupid about all this. Wake up about your money and your computer systems and how your friendly bankers and government is operating in violation of the very Constitution your descendants died for! Do you have any idea of the amount of guts it took for them to leave the old country and set up this new country.

You and I better keep watch over our constitution because the next time a rogue government crops up in violation of human rights, the next "ocean" to cross to get away from it all will have to be interplanetary or interstellar space.

Fractional Reserve: Crunching US into Nothing

The U.S. banking system as it is practiced today is another a repeat of history because time and time again governments seek to get control of the printing or minting of money so they have access to unlimited funds for their procreation. In the United states we have already had and rejected three central banks. The Federal Reserve System is now our fourth central bank and it practices, as most banks do, the criminal activity of "fractional reserve" banking.

Of course the banks do not consider it criminal because, "everybody does it," but realize when you hear this from some minion at the teller window or some bank Vice President that such a person is not only uninformed about world history as such relates to war, but uniformed about the history of money and the history of banking.

Here's what the banks do to this day to rob you of your purchasing power:

When people deposit money into a bank that bank, figuring everybody won't come back for their money at the same time, lends out more than what has been deposited. And they collect interest on this "extra" money they lend out.

In other words, they only keep A FRACTION of what's deposited on reserve in the vault.

That's why it's called fractional reserve banking.

Its as if you went to a party and checked your coat and while you were dancing, the coat check girl rented your coat out to a friend, pocked the money, and got the coat back into the closet before you asked for it when leaving for the night.

The banks do exactly this with your money. They collect interest (rental fees) on money that does not exist. In fact, for each $100,000 that is deposited, the bank lends out 9 times this sum- $900,000 by creating lines of credit in checking accounts - and collects interest on this. Of course none of this extra interest they collect is paid to you as a depositor, you only get your miserable 4.5% or what ever the bank rate currently is posted in the lobby. The bank's stockholders get the rest of the interest.

In essence the banks are creating money out of nothing and charging interest on it for their benefit. This is known as "fiat money." This is what the Federal Reserve System does and authorizes for its daily deeds: creates money out of nothing.

But the Federal Reserve creates money out of nothing in a very sly tricky way, a way that is hard for the ordinary citizen to decipher.

To simply turn on a printing press and run off dollar bills (aka "Federal Reserve Notes") would be crass. They use a system, a machine, known as "The Mandrake Mechanism."

Here's how it works in the words of G. Edward Griffin:

"The entire function of this machine is to convert debt into money. It's just that simple. First, the Fed (short for Federal Reserve) takes all the government bonds which the public does not buy and writes a check to Congress in exchange for them. (It acquires other debt obligations as well but government bonds comprise most of its inventory). There is no money to back up this check. These fiat dollars are created on the spot for that purpose. By calling those bonds "reserves," the Fed then uses them as the base for creating 9 additional dollars for every dollar created for the bonds themselves. The money created for the bonds is spent by the government, whereas the money created on top of those bonds is the source of all the bank loans made to the nation's businesses and individuals. The result of this process is the same as creating money on a printing press, but the illusion is based on an accounting trick rather than a printing trick. The bottom line is that Congress and the banking cartel have entered into a partnership in which the cartel has the privilege of collecting interest on money which it creates out of nothing, a perpetual override on every American dollar that exists in the world. Congress, on the other hand, has access to unlimited funding without having to tell the voters their taxes are being raised through the process of inflation. If you understand this paragraph, you understand the Federal Reserve System."

Thus, collecting interest on demand deposits is fundamentally dishonest, if not out right theft or fraud, because one has no right to collect a covert rental fee (interest payment) on an asset to which they do not hold legal title. The banks, all part of the Federal Reserve System, are doing this today with abandon as described. History demonstrates that in every civilization where this has been done before, where fiat currency can be all too easily created out of nothing because it is not backed by silver or gold, for instance, there were crashes and hyper inflation, sooner or later.

Gold & Silver: On Nixon's Enemy List

Have you ever wondered why, on August 15, 1971, President Nixon signed an executive order decreeing that the U.S. would no longer redeem its paper dollars for gold.

Gold or silver backed currency seems to be the enemy of governments because it curtails their ability to create fiat currency and thus wage war to accommodate the International Bankers demented agenda. Currency that is backed by nothing, and hence subject to manipulation and hence inflation, has to have legal tender laws in place to force the citizens to use it "for all debts private and public" - as is the case with the U.S. currency.

Debt The U.S. Government, by continually creating debt instruments (i.e., T-bonds, T-Bills and T-Notes), is devaluing our money supply because it is having the Federal Reserve issue checks "secured" by these debt instruments as if they were real assets. Just because they are backed by the "full force and credit of the United States" does not mean that they should be considered assets on the Federal Reserve's balance sheet. This is "creative accounting" at its worst and is, in effect, money created out of nothing and backed by less than nothing - debt.

This money created out of nothing is what the Department of Defense, for instance, uses to pay its defense contractors with so they can continue to employ citizens (remember over 50%already work for either federal, state or local government) to build war machines to keep the government in power.

Then these checks, spent by the defense contractors, for instance, eventually find themselves deposited into the nation's commercial banks as demand deposits. Under the fractional reserve system (regulated by the government sanctioned Federal Reserve banking cartel in two-step with itself), the money is lent out to customers and interest is charged. But since the banks have learned by experience that all of the customers do not usually come by to demand their deposited money at the same time, the banks lend out more than they have on deposit - nine times more to be exact. This further inflates the money supply and devalues our dollars. The only ones that win are the banks with the above system known as the "Mandrake Mechanism."

The news media plays an "important roll" in continually stirring the international barrel in the name of reporting "news" so that the citizens of each country feel obligated to buy government bonds to fight these wars - which are really bogus. Of course most of the top news executives are CFR members just doing their jobs steering the world towards that high-tech, one-world feudal slave society of the future.

If you agree with at least 51% of this article, please forward it to your mailing list. The mainstream media may or may not address this subject, thus it's up to responsible citizens to disseminate important issues
so that a healthy public discourse can be pursued.

Don't forget to click on the below link to watch FIAT EMPIRE - Why the Federal Reserve Violates the U.S. Constitution
so you will have a better understanding of what fuels many problems under study by the Jaeger Research Institute.

Permission is hereby granted to forward, quote, excerpt or publish all or part of this article provided nothing is taken out of context and the source URL is cited. For articles written by James Jaeger, you are welcome to credit yourself as author, provided you at least get this information out. If you wish to be removed from this mailing list, go to however, before you do, please be certain you are not suffering from Spamaphobia as addressed at

Source URL:

| Home Menu | Mission | Balanced News | Movie Publications |
| Jaeger Research Institute |