PLAIN TEXT VERSION (August 28th, 2009, revised, October 7, 2009)

"Mathematical proof of how the Fed has been fleecing us for a
substantial percentage of our GDP in every year since its inception in
1913"

[Title courtesy of a Fed-incensed colleague re: Ron Paul]

W. Curtiss Priest Editor, CITS Capital & Debt Watch
BMSLIB@MIT.EDU

This "proof" now available via:  http://tinyurl.com/FedFleeceProof
a.k.a http://cybertails.org/Bleed.txt

Extracted from cyber-soc@topica.com (CyberSpace Society List, send
e-mail to BMSLIB@MIT.EDU to join) Subject: let's concentrate on
leverage in healing the US of A (Priest reassesses the current
situation) Date: Fri, 28 Aug 2009 12:20:16 -0500 Organization: Center
for Knowledge, Learning & Social Progress

EXTRACT from CyberSpace Society post:

6.  I now understand that the 4% inflation rate is a "slow bleed of
society" created by the "old bankers."  This is a form of the long
con.  The Fed is a diversion in this con-job.

This slow bleed destroys the ability to build up savings and maintain
financial stability; this slow bleed destroys families; this slow
bleed makes the (unworkable) Social Security System necessary.

There is no honest reason that a five cent candy bar shouldn't still
be five cents today.  This bleed has nothing to do with
hyperinflation.  This bleed has nothing to do with the destructive
innovations of the new bankers, e.g., derivatives.

Both Jefferson and Jackson realized the fleecing, the bleed, by these
so-called national banks -- and got rid of them.

But, like any very long con job, the "old bankers" just go into hiding
and wait for another opportunity to begin it again.  Look at the 1913
Federal Reserve Act. Examine the single paragraph giving the FOMC
(Federal Open Market Committee) the legal right to sell "scribbled
pieces of paper" as if genuine US treasuries.  Note the Barron's chart
over 60 years http://www.elearningspace.org/debfom.gif   Notice that
this Committee with regulations only known to itself, has quietly been
bleeding the nation, year by year at 4% of GDP.  It ALWAYS sells more
"obligations" than it buys.  Only 10% of the proceeds go into the US
Treasury.  The rest is a gift to all member banks to be lavished  as
they will.  In 1987 dollars, this meant that 400 billion dollars was
created (do not confuse this with fiat money, this is sheer counterfeiting)
So $40 billion, a horribly regressive tax, made it into the Treasury,
and 360 billion was sent to "friends and relatives" of the (old)
bankers.

However, today?  Our problems are so much greater than this larcenous,
slow bleed, and would Obama, Bernanke, Krugman, etc. care, if they
clearly knew? And, as the bleed was always geared to an increase in
the GDP (excused by the "need" to increase the money supply, which
Milton Friedman noted, see recent obituary of his wife, where Friedman
says "inflation" is due to the increase in the money supply -- note:
this does not make it necessary nor any less larcenous), and in that
our GDP is contracting ... does that mean that the "old bankers" will
now purchase MORE obligations than they sold, and thus give back the 
money?  Or, if Batra is correct ... that we are now a third-world
country that is printing money (the trillions just printed as
"stimulus") -- that like all third-world countries we will extinguish
ourselves in a poof of hyperinflation.

And the Fed per se, only worsens matters in general.  Greenspan
destroyed this country by dropping the discount rate to 1% after the
dot-com boom/bust.

So, in the middle of all this chaos, would closing the Fed be of any
use even if the slow con were fully exposed?  First, should the bleed
be permanently stopped for all time?  Yes.  Second, DO close the Fed
today if it serves the greater purpose of restoring tranquility and
the faith of China and others in not selling us out.