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Context of 'October 6, 1979: US Federal Reserve Announces Tightening of Money Supply'

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Ben Klassen, the founder and leader of the Church of the Creator (COTC—see 1973), mails unsolicited copies of his booklet, “The Brutal Truth About Inflation and Financial Enslavement—The Federal Reserve Board—The Most Gigantic Counterfeiting Ring in the World,” to people and organizations he feels might be interested in his views. The essay alleges that “the Federal Reserve banks are owned, lock, stock, and barrel, by a criminal gang of ‘International Bankers,’” and claims, “The Federal Reserve owns the US government and manipulates it like a puppet, solely for the interests of this avaricious international gang of Jewish jackals, who control the world, its money, and its economy.” The essay concludes, “Now that you understand the Jewish program of piracy, looting, and enslavement by means of the Federal Reserve and money manipulations, now get the rest of the story and the program of the Church of the Creator by reading their White Man’s Bible: Nature’s Eternal Religion” (see 1981). [Anti-Defamation League, 1993]

Entity Tags: Benhardt (“Ben”) Klassen, US Federal Reserve, World Church of the Creator

Timeline Tags: US Domestic Terrorism

The US Federal Reserve, under recent Carter appointee Paul Volcker, declares that it will begin a major policy shift by tightening the money supply. Its main method of doing so will be significant increases in the interest rate. [Campbell, 2005, pp. 194-195]

Entity Tags: Paul Volcker, US Federal Reserve

Timeline Tags: Neoliberalism and Globalization

As a result of Paul Volcker’s tightening of the US money supply (see October 6, 1979), 145 developing and emerging market economies pay a total of $7.673 trillion (in current dollars) in order to service their external debts. $675 billion of this money comes from Africa, the poorest continent in the world. Despite these massive payments, the external debt held by these nations actually increases from $618 billion in 1980 to $3.150 trillion in 2006. [Nakatani and Herera, 6/2007]

Timeline Tags: Neoliberalism and Globalization

A combination of factors puts the Mexico into a major balance of payments crisis. US Federal Reserve Bank Chairman Paul Volcker’s decision to increase the Federal Reserve’s interest rate (see October 6, 1979) increases the amount of debt held by the Mexican government. In addition, a decrease in the global price of oil and a recession in the US (thereby decreasing US demand for Mexican goods) makes it harder for Mexico to pay off the debt on its own. The Mexican government decides to devalue the peso, its national currency, by 78 percent. [Hart-Landsberg, 12/2002]

Entity Tags: Mexico, Paul Volcker

Timeline Tags: Neoliberalism and Globalization

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