Submitted by mikla on 10/02/2010
This is a relatively short piece, because a longer one may be considered "conspiracy theory". Similarly, I've removed all citations and references (US Supreme Court rulings, etc.) because those may obscure the point, since people's eyes tend to glaze over with such (mostly irrelevant) facts/details. However, all assertions here are easily/trivially provable with a simple web search, or are obvious logical conclusions (with which the reader is free to rebut).
Rather, these are merely clinical observations and assertions regarding what I would do to become King of the World, if I were Ben Bernanke.
- Background: The US Federal Reserve (i.e., "Fed") is a private institution, which the US Congress and US Supreme Court agree is not part of the US Federal Government. Rather, the Fed is merely a private bank.
- 2. Many private companies exist in the United States. The Fed is one of them.
- 3. Many private companies have contracts with other companies, and even with the US Federal Government. Some private companies have "charters" established through the US Congress (i.e., "Government Sponsored Entities [GSEs]"), and thus may be considered "pseudo-private". The Fed has such a charter. However, the charter merely establishes bounds regarding the institution's founding and behavior. Typically, that charter still permits the chartered private company to sell shares and perform other market functions typical of a private company (that was the goal, which is why the GSE was sponsored in the first place, so the government could "kick-start" a private enterprise).
- 4. Should the US Federal Government dissolve, private companies would continue to exist (e.g., they are owned by their shareholders, they have debt obligations to their bondholders, and they engage in contracts with other companies, in addition to possible contracts with the Federal Government.) True, private companies holding contracts with the (now-dissolved) Federal Government would no longer have those contracts (since the counter-party no longer exists). This is a typical occurrence with any contract (dissolution through defaulted counter-party) which has nothing to do with the lifespan of the remaining party, except for possible losses associated with contract termination (e.g., loss of future revenue, etc.). Similarly, a private company established through charter with the Federal Government would continue to exist when the Federal Government is gone (it just means the charter is no longer in effect, since the sponsoring institution no longer exists). That now-unchartered organization continues to exist because it is still owned by its private shareholders, still has bond obligations, and still has other outstanding contracts/agreements.
The above assertions suggest the Fed, as a private institution, can continue to behave as a viable private institution once the US Federal Government is gone. In such a case the Fed would be just like any other private institution (it simply would no longer have a US Congressional Charter). These are the implications:
- The US Congressional Charter gave the Fed a monopoly control of the US $dollar. Literally, the dollar (a "Federal Reserve Note") is the intellectual property of the Fed, not of the US Government. The charter "promotes" use of the dollar as a currency, and in return the Fed (at some level) is "restricted" in what it can do with the dollar.
- The Fed has claims on the US Federal Government. The US Federal Government does not have claims on the Fed. Thus, dissolving the US Federal Government does not trigger Fed liabilities.
- In the event the US Federal Government dissolves, the charter would no longer exist. However, the Fed would continue to exist (e.g., it still owns the intellectual property called the "dollar"). Other parties are free to interact with the Fed if they wish (like with any private institution). However, the Fed would no longer have "sponsorship", so these interactions would be voluntary.
- Without a charter, the Fed is free to arbitrarily establish policies for its intellectual property (the dollar), and even to establish a new charter with another institution.
Read On...
See this Amp at http://bit.ly/hjSkLQ
Tweet