Criminal Fed Inflation Clearly Explained 50 Years Ago (Part one and Part two)


Written by Merrill Jenkins in the 1970s The criminal truth of the Federal reserve was very well explained to Americans. Why no Revolution then?`This rerun is for those folks who don’t seem to get it. Many believe JFK understood the facts. Ron Paul does.

by Tom Valentine


There is a theory known as the Theory of Cognitive Dissonance, which holds that the mind involuntarily rejects information not in line with previous thoughts and/or actions. Brace yourself, the following message may be entirely different from anything you believed to be true heretofore. If you are unaware, you are unaware of being unaware!

It can be extremely difficult for well fed, comfortable and amused people to conceive of a system of plunder that they, their parents and grandparents were born into along with the plunderers, their parents and grandparents, yet such failure to see does not prove the non-existence of that system, it only insures that it will continue until the people are stripped of all of their wealth and reduced to serfs.

Throughout history, governments have plundered their citizens. Ancient governments clipped the edges of coins and melted the clippings to make new coins, which also were clipped. The serrated or milled edge of coins was intended to prevent that practice. As time passed, the plunderers progressed to debased coinage, that is, base metals were switched for all or part of the precious metals in the coins. Still later, non-redeemable paper currency was used to steal the fruits of men’s labor. The most sophisticated plunder yet inflicted on trusting citizens combines the use of controlled news media; paper and metal tokens; credit (monetized debt) and imaginary taxes. The news media and schools deceive the people to believe that copper tokens and credit are “money”; that prices are inflation and that some of the “money” must be returned to the plunderers as taxes even though the plunderers have access to unlimited “money.”

The plunderers’ creation and financing of foreign “enemies” helps to convince the victims that taxes are needed to support government while largess to the most robbed poor buys votes to perpetuate the plunder.

The ancient Chinese carved in stone, “Disperse the money, collect the people.” As the Romans had bread and circuses, we today, have food stamps, football, foosball and fools on TV ad infinitum. We must be distracted at any cost, after all, when the plunderers originate “money” themselves, cost, to them becomes meaningless!

With 50 different ways to spell ‘theft’ in the English language, the most insidious method—inflation— is seldom thought of as being a criminal act. UNPROSECUTED FRAUD IS NO LESS FRAUD!

In spite of what the inflater-controlled news media tells you, INFLATION IS BANK CREDIT or any purchasing unit that the first party to use gave up nothing to get. Counterfeit currency is a good example. Ever higher prices are the result of a privileged group introducing into and bidding in the marketplace, fraudulent purchasing units and getting something for nothing.

Check your billfold. Any bills you have without a promise to pay on them are counterfeit! That is, if counterfeit can be defined as anything fraudulently labeled to be something that it is not. Until 1963, our currency bore a promise to pay x dollars to the bearer on demand. How could the paper become what it once promised to pay by simply deleting the promise? If it promised ten oranges, how much orange juice could you squeeze from one 10 orange note?

Congress sanctioned this form of theft by passage of the infamous and unconstitutional Federal Reserve Act on Dec. 23, 1913. It was on that day that today’s runaway inflation began to accelerate. The purported purpose of that act was to create an “elastic currency,” a “currency” that was superior to rubber checks in that it could be stretched but it would not “bounce” back at the issuers. This feat was accomplished simply by seeing that there was no space provided on their checks (dollar bills) for endorsements. Clever, huh? Their unfunny money was needed to prevent booms like World War II and busts like 1929 neither of which could have occurred without their fantastic elastic. Modern wars require much modern “money” and the Federal Reserve “system” is the only source of such unlimited larcenous devices . PLEASE see your dictionary for ‘device.’

In passage of that act and creation of a private corporation, deceitfully named the “Federal Reserve,” congress and President Woodrow Wilson sanctioned what inflaters were once hung for, that is, fractional reserve banking. In so doing, they showed their contempt for the constitution that they swore to uphold. (See Art. 1, Sec. 10 , U.S. Constitution.)

When the private corporation now known as the “Fed.” issued their first fraudulent irredeemable note in 1914, they began to fill the lake behind the dam that is now ready to burst and drown us all including many bankers in a sea of spurious specie.

Knowing the possibility of such a disaster, the money manipulators devised a “spillway” for their “dam” which became the 16th amendment (income tax) . As they issued more and more fraudulent notes to expropriate our wealth , a graduated income tax was necessary to relieve the pressure of competitive bidding of their fraudulent devices by the unsuspecting non-bank public. A pressure which unrelieved would ultimately crack their “dam.” The same duped congress in the same year, passed the 16th amendment for that purpose was falsely claimed at the time that the tax was needed to “pay the interest on the debt” and that it would “soak the rich.” Apparently enough congressmen believed that propaganda. It was in fact to keep the rich from getting “soaked” by their “dam” bursting!

The tax started at 1% and was never to exceed 3 % . That wasn’t too hard to swallow , was it? When they saw that “spillway” was inadequate, they care fully planned another. It was called “Social Security.” Since they couldn’t find justification for increasing income taxes, a brand new tax was the answer. To make it more palatable to the people, employers were compelled to pay one-half. It started out at just 1% on a maximum of $3,000 which came to only $30 per year. Who could about that? Wow! Only thirty bucks a year worries in your old age. Ponzi was a piker! How much are you being gigged for now?

Their whole scheme wasn’t too complicated . They first established that they would have re serve requirements of 40 % . That meant that when a sucker deposited ten dollars of gold in their “system ,” they issued a paper certificate that bore a promise to pay ten dollars in gold to the bearer on demand.

They gave that certificate to their mark (sucker) and simultaneously they issued 15 Federal Reserve notes while they kept the gold! The people saw nothing wrong with that, after all, they could return their certificate to the bank and redeem their gold anytime they wanted to. They simply didn’t see the barb on the hook; there wasn’t enough gold for all of the certificates and notes outstanding , only 40%. As time passed, they reduced their reserve requirements to only 25%, which meant that f o r every dollar of gold deposited, they issued one certificate and three notes while they kept the gold . Abbott and Costless made a fortune with the routine, one for you , two for me, three for you, four for m e, etc.

Where there was once just one purchasing unit, now there were five , one gold coin; one pap er certificate for gold; and three Federal Reserve notes, all but the gold coin were ready to be bid against each other causing prices to rise. Take note that we said rising prices were caused by the excess purchasing units. The Federal Reserve notes were the inflation—higher prices were the result of the inflation; the extra purchasing units.

The certificate would be inflation too, if and when the gold was being bid in the marketplace against it. Theoretically , prices would quintuple if all of the purchasing units were being bid against each other at the same time.

The income tax w as instituted to remove some of the purchasing units held by the non-bank public from bidding. The primary function of all Federal taxes and many state taxes today is the same as income tax; reduce bidding of non-bank public.

When the Federal Reserve wrote in The National Debt :

“ The Federal Government in cooperation with the Federal Reserve , has the inherent power to create money—almost any amount of it,” it didn’t need Einstein to explain that taxation is not used to support government! Several Federal Reserve and IRS publications openly admit or at least allude to the truth.

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Part Two


Every Federal Reserve note issued was one unit of inflation for each unit (dollar) of money that appeared on the note. By 1933, the inflaters held enough notes to claim all of the gold so they had their front man (the con man of all con men) FDR, issue an executive order declaring that it was against public policy for the people to use gold in trade. When 95% of the suckers turned in their gold, the “price” of gold was changed from $20 to $35 per ounce. That’s what you call getting them “coming and going.” Not only had the people been robbed of their gold, they were conned to believe that the dollar was something tangible, concrete rather than abstract, and this misconception greatly facilitated further plunder of their silver. The dollar, since April 2, 1792, has always been a measurement of money, it is not and never was the money. How can anyone say “dollars per ounce” when the dollar itself is a measurement? Title 31, United States Code 371, tells us that the money shall be expressed in dollars. What further proof does anyone need that dollars are not the same as money?

Until June 24, 1968, silver coins were current as money. What took their place? Before anyone tells the IRS that they received or spent dollars of money, it would be advisable for them to learn what became current as money by law , when silver coins ceased to be the money. Anyone charged with tax offenses should file an interrogatory, asking the revenue agents to tell them what commodity is current as money pursuant to Title 31, U.S.C. 371.

After the crash of 1929, many people lost confidence in the banks and were more inclined to make “deposits” in their back yard. When the Federal Reserve tells us today in Modern Money Mechanics that our bank deposits are merely “book entries,” do you think that the F.D.I.C. was created to insure depositors against loss of their uninflatable silver? Or was this agency created solely to instill confidence in the Federal Reserve “system” while “book entries” were systematically switched for their uninflatable silver?

The Economics textbook in one St. Louis County high school reads : “To help restore the public’s confidence in banks…Congress passed legislation setting up the F . D.I.C.” There’s your answer! Further they state: “Income tax is one of the government’s most potent weapons…” Income tax, A weapon?

Yes , it is but their most powerful weapon is fear . Th e average citizen is so cowed with fear that they’d rather play the game and send reports of “dollars” earned and spent to IRS than to ask the IRS what the money is by law that those dollars are quantities of .

Also, on page 3, of MMM, the Fed readily admits the main reason we accept their spurious devices is because of “confidence. “Are they, or are they not essentially admitting that they operate a confidence game? “By their fruits, ye shall know them!”

We were told in 1965 that silver got “too expensive” to use as money. Silver never got e x pensive! The Fed. had simply issued so many fraudulent claim checks for silver that to prevent exposure of their crime, reserves had to be reduced to zero. In six years time our circulating coins became silverless.

The Federal government profusely publicized that the new “dollar”coins contain only 3 cents worth of copper and nickel. Those who accept them sustain a 97% loss and tell IRS that they had a PROFIT! Speaking of mind control in 1984…IT’S HERE!

In 1920 , writing in Economic consequences of the peace , English economist , John Maynard Keynes said , “Lenin was certainly right , There is no more surer, more subtle means of destroying the existing basis of society than to debauch the currency.”

By a continuing process of inflation , (Fed credit us age) governments can confiscate secretly and unobserved , an important part of  the wealth of the citizens . The process engages a ll of the hidden forces of economics on the side of destruction and does it in a manner that not on e man in a million can diagnose.” Further on he wrote , “If  governments should refrain from regulation (taxation) and allow matters to take their course (price explosion), the worthlessness of the money becomes apparent and the fraud upon the public can be concealed no longer. “

How true! In 1971 Richard Nixon said , “I am a Keynes  in economics.” The high school text ( above ) says the Keynes theory is ‘ “most widely a cc e pt e d by economists in the nations of the Western industrial world.” This writer believes that we need never fear an invasion as long as we have Keynesian economists showing 15,000 commercial bankers how to destroy the existing basis of society by issuing credit that they call “money.”

Writing to Amos Bruce of St. Louis, the Honorable Ron Paul of Texas said, “Strictly speaking, it probably is not ‘necessary’ for the federal government to tax anyone directly. It could simply print the money it needs. However, that would be too bold a stroke, for it would then be obvious to all what kind of counterfeiting operation the government is running. The present system combining taxation and inflation is akin to watering the milk: too much water and the people catch on.”

There you have it from a congressman! Taxation is used to get some of the “water” out of the “system” so that we won’t “catch on” that government takes everything they want from us without compensation in total violation of the 5th amendment.

Legal tender laws compel us to accept their “water” and we don’t complain because the same laws compel others to accept it from us. Only if we hurry, can we obtain something of value equal to what we surrendered for their illusory, watery “payment.” Their “water” like water , cannot flow uphill to its creator as taxes.

When the dollar by law is a measure of wealth and the Federal Reserve admits in print that they have removed all of our wealth from our banks and reduced all deposits to “merely book entries”, there are no tax dollars going to Washington but there are unlimited checks coming from Washington as salaries, pensions, grants, social security, food stamps, welfare, warfare, federal funds, “revenue” sharing, foreign aid, ad infinitum. There is no such thing as taxpayer’s money, it’s all federal “money”! The aim is to get as many individuals and political subdivisions as possible dependent on federal checks that are nonpayable! Total dependency is total slavery! You can’t bite the hand that feeds you! Who will fight the unconstitutional federal monster when they are dependent on it? VERY FEW! All wealth that Washington takes is theft but the victims do not recognize it as such because they don’t end up empty handed. They get checks which authorize them to steal a like amount (less taxes) from their neighbors.

To complete the communizing of America by the elite, all that is necessary is to legislate our remaining freedom away from us and the masses are programmed to promote that legislation, ERA being a classic example.

Karl Marx’s 8th plank calls for “Equal liability of all to labor.” Income tax, inheritance tax and Federal Reserve filled Marx’s 2nd, 3rd and 5th planks while the ICC, DOT, FCC, CAB and postal service monopoly fill the 6th and “free” education fills the 10th. We are being planked into submission! “Freedom is the absence of legislation!”

When we accept the debt instruments of a private corporation for all that we produce, then through fear of imprisonment, return a graduated percentage of those green papers to the same private citizens who first got them for nothing, if that isn’t slavery, WHAT IS? Kublai Kahn did the same trick in the 13th century with strips of imprinted mulberry bark!

To regain our freedom, all legal tender laws must be repealed and 100% redeemable currency must be instituted Government by the producers of wealth can exist only when wealth is used as a medium of exchange and public servants are dependent on being paid with some form of wealth. Inflation is bank credit. BANK CREDIT IS THE CANCER OF CIVILIZATION.


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Tom Valentine (born August 20, 1935, same day as Ron Paul) is a businessman, writer, commentator and radio host with an anti-establishment perspective. He worked with Radio Free America from 1988 to 2004. He tends to align with issues from left and right ends of the political spectrum, as well as libertarianism. His main journalistic interests have been unorthodox health care methods and conspiracy theories. He is a believer in many alternatives as cancer cures, and believes that soy products are unhealthy for human consumption. All of his views are at odds with the mainstream medical community.