Looting Uncle Sam

You are remarkable! This has info that I failed to uncover in hundreds of hours of research. Thank you.

Cogent and NECESSARY, Russell. I am still reeling. Thank you for being a voice when there aren’t enough of us. Profoundly disturbing.

For those of you who are interested in more details, here is some background on the Federal Reserve you might find interesting.

Let me preemptively state that my blog isn’t a political rant. All political parties are equally suspect, in my opinion. So it’s not a right or left editorial. It’s a factual description of how the US has been looted by its protectors and its central bank over the last 3 years.

The groups that got the $16 trillion are familiar names. Bank of America. Citigroup. Morgan. Goldman. UBS. Barclays. Credit Suisse. Deutschebank. The list goes on. Many aren’t real banks – they’re stock brokerage houses/investment banks that weaseled their way under the Fed umbrella so they could suck at the milk tit. All are tight with the Federal Reserve System, which you may not realize is a privately owned entity with a veneer of governmental authority (its board of governors is government appointed). As one wag says, it is no more Federal than Federal Express, has no reserves, and isn’t a system – it’s a monopolistic central bank created by bankers in 1913 – bankers like JP Morgan and the Rockefellers (Morgan Stanley got $2 trillion of the aforementioned money). The Fed site uses lawyerly highstepping to avoid directly answering the question of whether it’s a private entity, discussing how the common stock is distributed amongst the member banks, making it seem de-centralized. It says nothing about the preferred, voting stock issued when it was created, or who holds that. For good reason.

A historical account of the creation of the Fed is available to anyone interested in “The Creature From Jekyll Island,” a fascinating read. In a nutshell, a group of the most powerful NY and European banks in the world got together and drafted what would become the Federal Reserve Act. Then, the Fed was created by Rockefeller’s nephew, a congressman, in 1913, when Congress was out of session for Xmas, so it was only his nephew and his crony congressmen who voted the act into law. When Congress got back, the US had a central bank. There was a lot of scrabbling because there weren’t enough votes, but that got ironed out by the money after the fact. It’s also why tax protestors argue the IRS, which was created in the same bill (as a mechanism to suck the money just circulated by the new Fed back out of the system), isn’t legal. A flawed argument, but I digress.

JP Morgan had created a banking panic a few years earlier by circulating rumors that several NY banks were insolvent (shades of Bear Sterns), and then swooped in at the last minute to save the day by bailing them out. He used that as reasoning to push the agenda of a central bank, which was largely unpopular, but which the European and NY bankers had been trying to achieve for decades. Suffice it to say that it was a creature created by the most powerful bankers of its time, ostensibly to stabilize markets to prevent volatility – you know, like the Great Depression and all the recessions that occurred like clockwork once it was created, or the manic bubbles fueled by easy economic policy (like the dot com and real estate bubbles).

It’s pretty easy to make money if you have the inside scoop on when money is going to tighten or loosen. As an obvious observation. Another is that either the Fed is the worst entity in history at what it’s supposed to be doing, or its agenda isn’t really what it represents.

$16 trillion dollars. Think about that number. I remember a few years ago when the $800 billion TARP program was hotly contested – it was a massive bailout for the banks which had engineered and profited from the very collapse that required the bailout. But guess what? $800 billion was nothing. Per the report, Goldman Sachs alone got over $800 billion from the Fed – at effective zero interest. Citigroup got $2.5 trillion. You are reading this correctly. Trillion. A for-profit company got handed $2.5 trillion, that it could invest in, say, T-Bills at 3%, with zero risk, and whose cost of money was zero. Can everyone do the math on annual interest on $2.5 trillion at 3%, risk free? Oh. Wait. That would be about… $75 billion dollars of profit, guaranteed. On $850 billion that Goldman got, that would be about, oh, $25 billion. For a company like Goldman that is no more a bank than I am, and that has been alleged to be committing gross acts of financial fraud at every turn – think misrepresenting Greek debt so it could deceive bond holders, or selling junk mortgage securities to customers (represented as AAA, of course) while allowing a big hedge fund to hand-select the bonds that were guaranteed to blow up, so it, and Goldman, could make billions when they did. That’s the kind of for-profit company the Fed feels deserves nearly a trillion dollars of taxpayer largesse.

On a related topic, one can’t consider central banking without considering the effect of money creation (money supply, or M3, stopped being published by the Fed in 2006) on the buying power of a dollar. The way inflation works is that the first person that gets all those new dollars gets 100% of the buying power. They can speculate, or buy land, businesses, debt, whatever, with 100 cent dollars. But the new holders of the dollars, who sold their real property or sold the speculative vehicles, now have dollars that aren’t worth 100 cents, because the news leaks that there’s so many more of them, so each unit has to decline in value proportionally to the amount of new ones that were created. So they get maybe 80 cents of purchasing power. That continues, until the guy getting a salary, sees his dollar worth 75% less than it was worth just a few years earlier. As is his savings in dollars. Sound far fetched? The US dollar lost 75% of its purchasing power since 2002. In one decade. Just look at the price of an ounce of gold, or silver. In 2002, a gold ounce was $350. Now it’s $1650. do the math. It now takes a lot more IOUs to buy that tangible item, which holds its value. If you are a for-profit bank in Belgium, then, and borrow $300 billion, you have the ability to generate windfall profits from that capital, and you just got a subsidy from the taxpayer that was never approved by either Congress or the American people.

I didn’t want to put all this in the blog, because it makes it too long to read. But the essence is that a cartel of banks, called the Federal Reserve System, just gave more money than ever envisioned in all recorded history…to its most powerful members, including the largest European banks, as free investment capital – even as Americans struggle to make their home and credit card payments.

Aside from the obviously disturbing social commentary I could launch, it’s time the population understood what was being done. A bunch of for-profit banks, many of which aren’t American, got handed the net worth of the nation to use as investment capital – a direct subsidy at taxpayer expense. I’m quite sure that most won’t believe what they can easily verify by clicking on the GAO report in the blog. That’s human nature, and it’s that apathy that all crooked systems rely on to keep stealing. We mock countries like Russia, where the government is run for the enrichment of the oligarchs (the mob), but our media also goes suspiciously silent when news that shows what’s really going on hits. If you think that’s accidental, I have several bridges for sale.

Thanks for taking the time to read this. Please circulate the blog to everyone you know. Keeping this a secret is criminal, but that’s precisely what the US “free” media has done. If you aren’t concerned, you haven’t read anything I said.

Sorry to be the bearer of lousy news.

Your Blog is always great, Russell, 😀
I’m a Brit, and when the ‘crash’ of 08/09 happened, I didnt find it believable the the US economy, which I knew was about $13/14 trillion, could be damaged by
$800bn of bad mortgages, and the banks involved couldnt all have been rocked by those mortgages.

Thats when I discovered that the problem was the $62 TRILLION of gambling the banks did, via ‘exotic financial instruments’ in an unregulated market that grew off the back of the mortgages, that did the damage.

The various bailouts banks have received from governments -not just in the US- is really being used to try and plug the $62 trn black hole in their balances. Hence them being unwilling to lend to people and small businesses.
So yeah, the Fed has been printing money. The Bank of England has been printing money- over here, they’ve called it ‘quantative easing’.
What really hurts, is that a bunch os &#*!holes can damage the world’s financial system through reckless gambling, and no one goes to jail.

Instead, we give them MORE money!

And former colleagues have been warning that this would happen for the last 15 years- but no one was paying attention.
For example, Prof Frank Partnoy, formerly of Morgan Stanley, now a professor of law and finance, was warning as far back as 1997 that the size of the derivatives market then, was double the value of US stock, and more than 10 times that size of the US national debt. And he should know, seeing as between 1993-5 he and his team generated $1billion in fees, trading the things.
A number of people like him, got out of it, grew a conscience, and tried to bring what was happening to people’s attention. So that gentleman who said about you writing stuff that was ‘opinion’… needs to spend the next 6 months looking at the audits or published accounts of the banks and investment houses that collapsed.
And yeah, I’ll be spreading the word about the GAO report and the article.