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The Wallace Street Journal

Stiff the Fed

February 11, 2011

By David Bond, Editor

Wallace, Idaho " Ron Paul has written a book, End the Fed, well known in these circles. We have a better idea: Stiff the Fed.

In case you missed it, the financial cable network CNBC actually produced something informative a little while ago. It listed our 15 biggest creditors, the entities to which the captive citizens of the United Snakes of America owes money.

Canada, which we always held as infinitely more sensible, turned up in the Top 15 for the first time. We owe Canada $3.6 billion. Coming in at 14th is Hong Kong, at $138.9 billion. We owe the Cayman Islands' banking centers $146.3 billion. Twelfth is Brazil; we're into them for $184.4 billion. We owe OPEC $210.4 billion. We owe the insurance industry $261.8 billion. We owe domestic commercial banks and credit unions $269.8 billion, making theirs our 9th biggest I.O.U. The Brits and our own state and local governments are tied for 7th place at $511.8 billion each. We owe mutual funds $637.7 billion and pension funds $706.4 billion.

Are we beginning to see a pattern here? This thing is beginning to go logarithmic. We owe Japan $877.2 billion. China ranks a measly third: they've been shedding U.S. debt like crazy, converting it to stuff we used to do, like mineral and oil production, but they're still just a hair shy of a trillion, $895.6 billion to be precise.

The last two surprised us. Holders of U.S. Savings Bonds, and a category CNBC calls “other investors” rank No. 2, at $1.458 trillion.

And the Number One I.O.U.? Drum roll, please: it is our very own United Snakes Federal Reserve Bank, which has us on the hook for a staggering $5.351 trillion! That's right. We owe the Banksters in our own midst interest-bearing debt more than five times what we owe the Chinese we're always sniveling about.

We owe Ben Bernanke's crooked, miserable Jekyll Island creature 10 times more than we owe the money-grubbers at the counting houses in London. Noise from the cute brunette talking head at CNBC: “So no big deal, then " we just owe it to ourselves.”

This is indeed a Pogo moment: “We have met the enemy and he is us.” Because who, exactly, is “ourselves.” A good question, and one to which this writer can proffer no answers. The Economist serves up some circumlocution on the subject but basically paints the players as victims of speculation even as its editor attends the annual Bilderberg get-together, off the record of course.

But somebody shoved $5 trillion of debt up our stern-bearings, and stands to reap a tidy profit on the compound interest which we must pay to service such debt. But there is an old and worthy saying. Owe the Bank a little, and the Bank owns you. Owe the Bank a lot, and you own the Bank. So we've got some leverage here, n'est-ce pas?

Let's go down this list. No way we stiff Canada. We share North America and the Great Lakes with them, and we need their beer, lacrosse and the NHL and the three-downs-only Canadian Football League. Plus, it would just not be Polite, and Canadians are sticklers for Politeness. Settle with them, dollar-for-dollar. We spend more on chocolate bars every year (and Chicago election-fixing) than we owe the Mounties.

We're not so sanguine about the Tommies. The Brits have invaded us twice, and we think they were most likely behind that beastly Jekyll Island swindle back in 1913 that brought forth the Federal Reserve. Still, some of us have family back there on Old Blighty. Offer the Brits two bits on the dollar, and invite them to invade us again if they don't like it.

The Caymans? Interesting question. Given that it's probably all drug money down there, we should tread lightly, insofar as all those black-market drug fortunes are a direct consequence of prohibition here in the U.S. Fifty cents on the buck, with our apologies. Considering the taxes they've escaped over the years, they'll take it. Brazil? Hmmmmm, they've got more oil than Venezuela, and as we do not have the will to develop our own petroleum and metal reserves and resources, we'd better be very nice to Brazil if we want our cars, trucks and trains and furnaces to run. We'll need them. Treat them like Canada, even up.

As for the Little Old Ladies, the folks holding U.S. Savings Bonds, better square up with them as well. It would be suicidal to stiff our parents, because they fought in actual declared wars and are handy with rifles.

This leaves us with the Federal Reserve Bank, this mysterious beast in our midst, to whom for no reason known to God we are paying interest. Our interest payments to this weird ghost will in a few years' time consume all of our “discretionary” federal budget, and we won't have paid down a farthing.

Why cannot this nation, like so many millions of U.S. homeowners, simply walk away from the mess this cabal of greedy Fed banksters created? Hand 'em back the keys, and keep our pledges to Canada, Brazil, China, Japan and our own savers at the same time. The interest saved by stiffing the Fed would retire our foreign debt in short order. Besides, it's time Timothy Geithner and Helicopter Benjamin Bernanke got real jobs " like maybe in a Chinese coal mine.