77 pages • 2 hours read
G. Edward GriffinThe Creature from Jekyll Island: A Second Look at the Federal Reserve
Nonfiction | Book | Adult | Published in 1994A modern alternative to SparkNotes and CliffsNotes, SuperSummary offers high-quality Study Guides with detailed chapter summaries and analysis of major themes, characters, and more.
Part 6Chapter Summaries & Analyses
Part 6: “Time Travel Into the Future”
Part 6, Chapter 24 Summary: “Doomsday Mechanisms”
Griffin looks at what could happen in the future based on the patterns he finds in the past and the policies that were current when he wrote the book. The national debt has only risen since the 1950s, and there are no signs of the government slowing its borrowing. The interest on that debt is so large that it easily takes a third of all tax payments to keep up with it. If the government stopped borrowing and decreased its size sufficiently, Griffin asserts, it could, over time, become solvent enough to cut taxes across the board. However, government employment is at an all-time high, and politically popular entitlements require significant bureaucracy to keep them running. Griffin argues that various entitlements could be dissolved and that the contractually required ones, like Social Security and Medicare, could be outsourced to private companies.
The national debt comes from several sources: private US investors, foreign investors, and to some extent the government itself. Foreign investors, as of 2002, owned nearly half of the US government’s debt. In 2010, the markets had lost faith that the government could repay its debt, so it stopped purchasing Treasury bonds. The Fed picked up the slack, pumping more fiat money into the economy. Griffin calls the foreign loans a “doomsday mechanism,” because if they are not renewed the Fed will have to buy more bonds with more fiat money, driving inflation higher. The sale of government bonds to private citizens also reduces investment in private business, slowing job and production growth. Griffin argues that the consequence of government spending and regulation combined with rising inflation over several decades is an overall decrease in spending power. Although the dollar amounts of wages have risen, spending power has decreased.
Griffin advances his claim that the goal of the financiers and central banking institutions is to create a world government based on socialist or communist principles. He assigns the United Nations and the IMF/World Bank the role of military and monetary concentrations of power. Because monetary manipulations are less likely to be noticed than military action, he believes the central bankers are using wealth concentration as a hidden weapon to force the world’s nations into a central government system.
He argues that the United States is the primary barrier to the plan’s fruition. The economic and military involvement of the US in UN and IMF actions are designed by CFR members in government to weaken the US sufficiently to enact the master plan. One of his points of support for this is his description of the Iron Mountain Report from 1966. There is considerable question as to the veracity of the Report. Griffin dismisses the issue of veracity, however, by arguing that whether it’s real or satire, the comparison of the Report to real events is disturbing.
The Iron Mountain Study stated that its purpose was to determine how best to stabilize society. Griffin argues that the true purpose was to discover how to preserve government by using the threat of war to keep citizens docile. If there were a world government, that institution could confiscate the weapons of all nations and maintain an enforced “peace.” That peace would be reliant on some mechanism to take the place of war. That substitute would need a convincing reason for compulsory government service to control dissidents. To convince the entire world to acquiesce to such a system would require an enemy threatening enough to unite the world under a single flag. This threat would not have to be real, merely credible. Environmental disaster is diffuse enough and rooted sufficiently in truth to be a potential option.
Griffin traces reports from 1970 to the present regarding environmental crises, using those reports and newspaper articles as evidence that the CFR is implementing the Iron Mountain Report’s findings to create a world government via environmental danger as a common enemy. Griffin uses quotes from Bertrand Russell, Jacques Cousteau, and Mikhail Gorbachev on the dangers of overpopulation and the necessity of a world government to support his claims. Additionally, Griffin references remarks by influential Canadian oil heir Maurice Strong which brand the US middle class as the primary threat to the environment.
Part 6, Chapter 25 Summary: “A Pessimistic Scenario”
Griffin states in the preview to the chapter that he has kept this chapter the same since 1994.
This chapter imagines a future dystopian scenario in which a US bank defaults on a loan to Mexico, causing an economic panic. The Chairman of the Federal Reserve attempts to calm the world’s bankers with promises of bank bailouts. In two days, the Fed has printed sufficient money to reassure private depositors, but more financiers are pulling their money out of US banks and investing dollars in bonds, alternate currency, and bullion. Initially, it appears the Fed has come to the rescue of both banks and citizens.
Two months later, there is a run on the banks by depositors. There isn’t enough money to meet the demand, and the Fed can’t keep up by printing money. The government declares a bank holiday and depositors use checkbook money to buy goods that they hoard. Prices soar, and politicians enact “emergency reforms” which are simply the same Federal Reserve methods that have led to the crisis at hand but increase the popularity of the politicians, including a measure to bail out the banks.
The flood of money into the economy (from bailouts and from foreign money returning to the economy) causes massive inflation. In the Great Depression, there was still specie backing to paper money, if not checkbook money, so the paper money still functioned, and recovery was possible. In Griffin’s story of the future, however, paper money is only backed by political promises. Currency inflates until it is worth less than the paper it’s printed on.
In 1961, Emergency Banking Regulation No. 1 was issued to cover the powers of the Treasury in the event of an attack on the nation. Those powers included confiscation of any money held in a bank or safe deposit box, imposition of rationing, and the ability to set prices for goods, services, and all property. The Federal Emergency Management Agency further has the power to detain citizens or relocate them for their safety in an emergency. Under these auspices, the government has the power to seize property and move citizens.
A year after the initial crisis, the Secretary of the Treasury announces a world treaty that creates a new world currency backed by assets including unused wilderness areas. The Fed has become a subsidiary of the IMF/World Bank. In addition, the treaty requires government-issued ID cards to be used for travel and to access bank accounts. To protect against counterfeiting, all transactions above a certain level are required to be electronically processed.
Three years into the crisis, there are massive protests demanding more government aid to the poor. The protests become violent, prompting those not involved to be grateful for the presence of the military. The revolutionary protestors are shadow-funded by the CFR. Those who suspect foul play are silenced by ridicule or by disappearance.
When the bailouts initially caused inflation, the housing market was affected first. Homeowners used their depreciating dollars to pay off as much of their mortgages as possible, causing the banks to absorb the loss. To protect the banks, Congress passed legislation to take over mortgages and determine the value of property based on what the government determines as fair. Mortgage payments became impossible to keep up with, and voters descended on the government in protest. Congress declared a moratorium on mortgage, quickly followed by the seizing of rental units and a moratorium on rent. The result is that Congress now owns all inhabited homes.
The UN imposes wage restrictions that wipe out any businesses that had survived the initial inflation. People are forced to work in government-run industries or be imprisoned. After 20 years in the New World Order, the world has accepted the way things are. The economy still exists, even under massive government control, but the populace is kept quiet with controlled inflation and occasional currency replacement as well as government welfare earned by forced work credits for a basic living.
Griffin turns to quotes from Jefferson, de Tocqueville, and George Orwell’s 1984 as past harbingers of exactly the sort of dystopia he describes. He argues that The Iron Mountain Report used 1984 as a primary inspiration for the plan described in the document. Orwell describes the world split into three nations that are perpetually at war. Griffin argues that this model is already being constructed with NAFTA, the EU, and APTA as the economic underpinnings. Ultimately, Griffin argues, the mechanisms are already in place and regardless of the initiating crisis or lack thereof, as long as current trends continue unabated, his vision of the future is the most likely one.
Part 6, Chapter 26 Summary: “A Realistic Scenario”
In the last chapter, Griffin attempts to explain how the dystopic vision described in the previous chapter can be avoided. The Federal Reserve System and central banking are too powerful now, he argues, to be defeated without significant difficulty, even possible national tragedy.
His final reason for abolishing the Fed is that it is the primary instrument of those working toward a New World Order of totalitarianism. To accomplish that, he says, is to go well beyond the typical means of social or political change, but he insists it is still possible.
He begins by explaining what shouldn’t be done. First, there should be a retraction of government rather than an expansion of government and its powers. Abolishing the Fed but allowing the Treasury to take over its functions would perpetuate the problem. The Fed is neither owned by the government nor by private interests; it is co-owned, and therefore, Griffin concludes, is protected by Congress and manipulated by private interests. Allowing the Treasury to print money in a Constitutional fashion, however, backed by precious metals, would be beneficial to the economy. However, if the government can issue fiat money, directly or indirectly, the problem remains. He also rejects any plan that manipulates the money supply.
Congress could abolish the Fed by repealing the Federal Reserve Act. However, that would throw the nation into massive economic chaos.
Griffin gives a step-by-step plan to abolish the Fed relatively safely by returning to the gold standard. To accomplish that, Congress must repeal legal tender laws, only print federal reserve notes (FRNs) to pay government bonds, define the dollar with a silver standard, and restore free coinage at the Mint. The next steps are to pay off bonds with FRNs and destroy the notes, then deregulate the banks and legally enforce all contracts including deposit agreements.
When the gold standard is re-established, the government is no longer printing fiat money, and the Fed is abolished, the next steps to economic success are to decrease the size and scope of the federal government. Finally, Griffin moves to disentangle the economic interests of the US from the economic policies of the IMF/World Bank and international central banks by exiting the United Nations.
The main growing pains in adjusting to the new system will come in the form of increased unemployment as some businesses fail with the phase-out of paper money, and on those on welfare and entitlement programs suddenly losing those benefits. Returning to a gold standard, however, will create new demand for gold and silver and drive an increase in precious metal mining as an industry. That will create short-term inflation, but Griffin argues that market forces will, as is historically shown, stabilize the market in a short period of time.
Griffin offers a roadmap for the problems in both the pessimistic and realistic scenarios for individuals and families. He advises people to get out of debt, diversify investments, maintain accounts at more than one bank, stick with investments that are familiar and understandable to the investor, and keep personal reserves of cash, coin, food, and water.
Griffin ends his book with the conclusion that the Fed is a creature born from collectivist values and there are many outcroppings aside from the Fed that threaten individual liberty and large-scale human economic and personal success. He provides a list of elements needed to combat collectivism, primarily organization and well-funded, well-informed active resistance.
Part 6 Analysis
The dystopian future Griffin imagines in Chapter 25 is written with a narrative tone and structure. This chapter is, in essence, a dystopian short story describing the world in a “what-if” scenario. Although many of the descriptions in this chapter are similar in tone to the descriptions of real past events, the frame of a fictional future creates a sense of impending doom. The fictional nature of this scenario also lends itself to Griffin’s conspiratorial worldview. Since there is no historical record against which to compare these future events, Griffin is free to imagine them in ways that confirm his overarching theory that a secret cabal controls the financial levers of the world. In Griffin’s imagined future, seemingly unpredictable, random events—the US defaulting on its debt to Mexico, the anti-austerity protests that turn violent—all lead inexorably toward the establishment of a New World Order in which a handful of interconnected central banks hold total, worldwide authority. The operating principle of this fictional future is the one articulated by scholar Michael Barken in his definition of a conspiracy theory: nothing happens by accident, nothing is as it seems, and everything is connected.
This bleak picture follows a similar structure to earlier chapters on the history of banking and the history of the United States: Griffin’s “pessimistic” future scenario looks a lot like his narrative of the past. This narrative continuity is another feature of the conspiracy theory as a mode of historiography: By cherry-picking data and mixing verifiable facts with half-truths and myths, Griffin has presented a history of the modern world in which seemingly random events are all part of a grand design being orchestrated by a handful of shadowy figures behind the scenes. He can then use this fictional future disaster as the ultimate demonstration of his thesis that nothing happens by accident: What looks to laypeople—and even to most lawmakers—like an unforeseeable chain reaction is actually the unfolding of a master plan.
Griffin wrote this chapter in 1994, and it remains unchanged when checked against earlier versions. By explicitly stating that he has not changed the chapter between the 1994 edition and the 2010 edition, Griffin implies that recent events confirm his predictions. The bailouts of major banks after the 2008 financial crisis, for example, could be read as such a confirmation. Inflation rose after the 2008 crisis as well, and though Fed monetary policy eventually brought it back down, a reader in 2010 might have thought they were witnessing the early stages of the “pessimistic scenario” described in Chapter 25.
The last chapter, Chapter 26, utilizes a call-to-arms, speaking directly to the reader: “Do not listen to Cynicism and Apathy. They are agents of your enemy. They want you to quietly get in line and submit without a struggle” (512). This exhortation seeks to pre-emptively discredit any skepticism of Griffin’s claims. If the reader has doubts about Griffin’s totalizing theory of history, these doubts are to be dismissed as the internalized “agents of your enemy.” By speaking of an “enemy” whose agents are everywhere (even inside the reader’s mind), Griffin flatters the reader as a romantic hero on a quest to defeat these enemies.
