How “Bail-outs” and Bail-ins” Are Just a Huge Transfer of Wealth

In our continuing effort to educate even those who call themselves “experts” on the economy, we have to continue with the facts that the banksters, MSM, and dupes that call themselves legislators don’t want you to see or understand.  We have, in recent past articles, shown you just the facts about the bailouts and now the bail-ins going on in the EU for what they are, just a huge transfer of public wealth to the hands a few elites in banking and the central banking system.

As we watch the economy continue to falter, and jobs vanish, don’t you wonder where all the so-called QE monies really went that were meant to stimulate the economy? Here we are, 5 years into this so-called recovery and unemployment in the US is still 7.6% and only 47% of Americans hold full time jobs.  The number one employer is WalMart and the number two employer is Kelly Temp Services! In the EU, there is a 40% unemployment rate and people’s bank accounts are being raided without consent to supposedly prop up the banks (Bail-Ins). Government services are being slashed everywhere and still nothing seems to be improving.

Well, even though you are not supposed to understand this, let’s look at the Central Bank Practices and especially at the issue of banks’ reserves at the FED and other central banks in the world. This is a complex subject with much technical jargon that confuses a lot of people. Besides, don’t be surprised that your bank branch manager on Main Street as well as lecturers in finance and economics are also ignorant on this issue. In the case of the latter, this subject is hardly taught in universities. And this is the reason why the scam has not been exposed or understood. But, for those who have a basic idea of bank reserves and how this huge amount of “excess reserves” have been created by the FED, have you asked yourself, “Why have I not spotted this scam earlier?”

Many have been taken in by the propaganda that “excess reserves” is the means to encourage banks to extend credit (give out loans) to desperate borrowers who needed urgent funds to survive and to jump-start their businesses. This propaganda is grounded on the assumption that there is insufficient liquidity in the market. This assumption is misleading.

What are Excess Reserves? The latest figures obtained from the H.3 release from the Board of Governors of the Federal Reserve System (the FED) shows excess reserves of about $1.794 trillion (data as of April 17, 2013)! This level of excess reserves is unprecedented and is the highest since reserves were legislated as a requirement.

Excess reserves are the surplus of reserves against deposits and certain other liabilities that depository institutions (collectively referred to as “banks”) hold above the statutory amounts that the FED requires in accordance with the law. The general requirement is that banks maintain reserves at least equal to ten percent of liabilities payable on demand. There is now data to show that as much as 50% of these “excess reserves” are held for United States banking offices of foreign banks.

 

Let me elaborate. Banks receives deposits from their customers which are inter-alia placed in current accounts (checking accounts) or time deposits (fixed deposit accounts) and which the customer can at any time withdraw from the bank. But, banking practice shows that at any one time, only a small fraction of customers would withdraw their deposits in full. So, there was no need for banks to keep all the deposits in their vaults to meet such a demand for payment. Laws were enacted to allow banks to keep in reserve a small amount of monies to meet such demands. That being the case – if only 10% reserves is all that is required according to banking regulations to meet repayment demands, why should there be such a huge amount of reserves, beyond the legal requirement of 10%?

Understand the fact that when a customer deposits monies in a bank, he is in law a “creditor” (he has loaned the monies to the bank) and the bank is a “debtor” (and he can use the money in any way at his absolute discretion, even to speculate). This is because the ownership of the money has been transferred to the bank. The money is no longer the money of the customer. It now belongs to the bank. And as long as the bank is solvent, and there is a demand for repayment of the deposit, the law of contract stipulates that the bank must repay together with the agreed interest that has accrued.

silver-coins-bars

Now here is where, legally it gets interesting.. if at the time when demand for repayment is made, the bank is bankrupt (i.e. in a liquidation) then the depositor/customer in law is deemed an “unsecured creditor” and must join the queue of all unsecured creditors to share the proceeds of any remaining assets after all secured creditors have been paid. If there are no remaining assets, the depositors get zilch! That is why and as illustrated in the bank confiscation of deposits in Cyprus banks acting in concert with central banks can expropriate all customers’ deposits to pay their secured creditors. You catching on here?

How did the Excess Reserves balloon to a massive US$1.794 Trillion? The Fed’s overall balance sheet has expanded from about $909 billion before the crisis (i.e. before 2008) to about $3.3 trillion in 2013. Of the $2.4 trillion increase, approximately $1.8 trillion is excess reserves. Banks were up to their eyeballs in toxic assets (financial sewage) and they are drowning in this cesspool but for the rescue efforts of the FED and other central banks they would have sunk to the bottom of the cesspool.

The FED created trillions of money out of thin air by a digital entry in its books to purchase the toxic assets (financial sewage) in batches from the banks. The objective of QEs is to save the banks and to save the US Treasury from bankruptcy and not Joe Six-Pack. However, in this article we are focusing on the banks. So, let’s say that the banks HAVE OVER US$10 trillion of financial sewage AND WANT TO DISPOSE THEM WITHOUT AROUSING ANY ALARM.  The monies flowed from the FED to the banks to purchase the financial sewage. The financial sewage is sucked into the FED’s financial vacuum. However the monies are not channeled to the banks’ branches in Main Street to be loaned out to Joe Six-Pack. It is re-routed back to the FED as “reserves”. When the reserves exceed the minimum 10% requirement, the excess is classified as “excess reserves.” This is merely a book entry! And adding insult and injury to Joe Six-Pack, interest of 0.25% is paid on the reserves (i.e. giving profits to the banks).

The banks are allowed to survive in spite of their massive frauds and other financial hanky-pankey. The banks are allowed to use digital technology (e.g. high-frequency trading) to corner the market and destroy Joe-Six-Pack. But, Joe-Six-Pack has to suffer the indignity of unemployment, foreclosures, reduced unemployment benefits, surviving on food-stamps, and other austerity measures. Starting to see the picture here and how this crap is how we are being fleeced like passive little lambs?

“The money flows from the FED to the Too Big To Fail (TBTF) Banksters to Buy Toxic Assets, which is sucked in by the FED’s Financial Vacuum, thereby cleansing the TBTF banks’ balance sheets. The money is then re-routed back to the FED as “excess reserves”.

The FED create monies out of thin air to bail-out the Too Big To Fail banks (TBTF banks) by purchasing their financial sewage (valued at book value as opposed to mark-to-market i.e. instead of paying only 10 cents on the dollar or less, the FED pays dollar for dollar) thereby removing the financial sewage from the balance sheet of the TBTF banks to reflect a “healthier” balance sheet as there are now less financial sewage in the banking system. And, because the TBTF banks are suffering losses, the FED pays 0.25% interest on the “excess reserves” created so as to generate easy profits for the TBTF banks for doing nothing at all. They are earning profits merely from a book-entry in the FED’s books!

The propaganda which I referred to earlier that such monies were meant to enable the TBTF banks to extend credit is therefore bullshit and a load of financial nonsense. So why are the so-called reputable economists at leading universities such as Harvard, Princeton, Cambridge, Oxford etc. touting this propaganda?  In spite of all this past mismanagement, the practices by the TBTF banks is continuing unabated, including the so-called record profits declared by the TBTF banks and the huge bonuses given out to the bankers and their hire-lings. These practices are all just window dressing as long as the toxic assets are not marked-to-market and not declared as junk. If such assets are properly declared, the fiat money banking system would be staring at a bottomless black-hole of toxic assets and indebtedness! What’s worse is these same TBTF banks are still up to their eyeballs in toxic debt, such as derivatives, credit swaps, etc.  In fact JP Morgan Chase alone has exposure more than twice the US GDP! JPMC is exposed just in interest rate derivatives at $45 TRILLION. Take a look at the Fed’s H.8 report to understand how bad it really is.

This has compounded the problem. After the Global Financial Tsunami, all the TBTF banks don’t have enough reserves to meet the withdrawal of deposits placed by customers before the crash. The TBTF banks don’t even have the requisite 10% reserves to meet these demand deposits (Old Deposits).  However, banks are continuing to receive deposits from customers of which 10% of these deposits must be transferred to the FED as reserves. Data shows that customers’ deposits are at an all time high (since 2007), but bank lending is not keeping pace.

Banks are not lending out what they are entitled to do so for two reasons:

1) The banks are using a portion of the “New Deposits” to meet the liability of having to repay the “Old Deposits” in the system. This is because even the excess reserves (created under the QE) are insufficient to meet the demand for repayment of the Old Deposits. So, part of the current New Deposits would be utilized for that purpose. This is the Deposit Ponzi Scheme.

2) Banks are earning no risk profits from interests on “Excess Reserves” at the FED and are only willing to lend to credible borrowers. In the present economic climate, there are just too few credible customers. This is another reason why banks are not lending.

When QE stops, the FED would not be out on a limb because the monies used to purchase the financial sewage from the TBTF banks are still in the FED’s books. The Fed need only to have a reverse entry in it’s books after re-packaging the financial sewage INTO SOME NEW FORM OF FINANCIAL PRODUCT OR WHATEVER (which the TBTF banks are adept at doing before the crash and are still continuing to do so) and dumping them back to the banks and another generation of stupid investors at such time when and if the banks would have recovered. But with the TBTF banks continuing their same toxic practices unabated there is no recovery, ever. Further, with the bank’s unbridled right (sanctioned by law) to confiscate the customers’ deposits (now commonly referred as “Bail-In”) using the Cyprus template, banks have additional financial resources to continue with the plunder and financial rape of the public.

I hope this helps us understand that this unabated transfer of wealth ends with our economic enslavement. The public must be able to understand these fundamentals and demand the end to this fractional banking system and the end of the FED. Your congressmen and women are dupes in this game, as they really don’t understand and therefore do what they are told to do. Inform them WE GET IT and WE DON”T LIKE IT, AND IT MUST STOP NOW! Fire the Fed, break up the TBTF banks and return to pre-1913 banking system controlled by the US Treasury. WAKE UP!  A special thanks to Matthias Chang of Global Research, who unknowingly contributed so much to this article.

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Updates from the Economic Warfront

Three years ago, as I began my ranting against the bankster elitists, I had stated their plan for economical slavery was unfolding in the most transparent way.  I stated at the time the mortgage loan debacle was only the first step.  I said at that time that based on the strategic use of credit swaps and derivatives, the next target was going to be both corporate and public pension plans. Indeed this began unfolding around 2009 and continues to this day.

At the time I also stated that after that goal was completed, the next target in their gun sites would be state and sovereign wealth. Again, this is exactly what is happening. First was Iceland, then the weaker members of the EU, and now is extending into the stronger economic nations such as the UK, France, Germany, the US, Australia and Canada.

Of all of these nations, only Iceland and the will of their people have prevailed.  Ireland is also showing some signs of effective resistance. The rest of the governments, under the rhetoric of “necessary austerity’ are slowly killing their economies and in the case of Greece and Spain, are already “clinically dead”. You see there is only one simple question that when answered reveals all.  When we talk about sovereign debt, one has to ask, “Who is this vast amount of money owed to and how did they acquire this debt obligation?”

We all know the answer to this question.  The bankster’s greed has continued unabated and now there isn’t even any attempt by the banksters to “paint lipstick on the pig”. They seemed until very recently unafraid of rebellion by the masses, criminal actions by governments, or any competitive actions against their plans.  Why were they so confident?  Their confidence stemmed from the reality that they have prepared well in advance to insure they “owned” the political and legal arms of the governments world-wide thus preventing any criminal penalties for their brazen fraud and theft.  Large fines were acceptable and a part of “doing the business”. The control of the political process insured they could endlessly print fiat money to “finance” their ongoing rape of the world’s economy.

They had also correctly anticipated that the masses would eventually try to rise up, so they upgraded both sovereign and state and local police forces to paramilitary capabilities.  They would simply overwhelm any efforts before these “uprisings” could gain momentum.  We have to admit they had anticipated each and every step very correctly and have been effective to date in squashing any meaningful resistance.  Until now…..

In their hubris, they may have made gross miscalculations in their unbridled greed quest. First, let me state that we try to remain apolitical in the information we present in this blog. However if the next story is true, then it is a matter of justice and patriotism to report, not a political leaning, one way or the other.

The election in the US is a very good example of how elitists have horribly underestimated the collective intelligence and will of the people. Remember the Karl Rove and Limbaugh ranting pre-election that it would be a landslide for Romney?  They were certain of this because first they were effectively suppressing the vote and just in case that wasn’t enough, they were sure they had effectively “rigged” the election in key states like Ohio, Virginia, and Florida.

However, something went very wrong.  Romney was quoted as being “shell-shocked” and Karl Rove displayed his denial breakdown on national TV when Ohio was declared for Obama.  What happened? From our sources, the real story may be revealed in the coming months, if the information given to the FBI sees the light of day.

Apparently, like in 2004 and 2008, Rove and his operatives had developed a sophisticated computer program called ORCA to manipulate the data in the vote tally process and had this program embedded in various areas.  Apparently this sophisticated program would intercept election data from various reporting stations, manipulate the results and then send it forward to its intended destination.

This scheme was however uncovered by cyber sleuths under the Anonymous banner and this group had even warned Rove, et al, directly that this plot would not be allowed.  See the warning here.

From our sources, we learned that these cyber sleuths hacked the ORCA program and placed a firewall called “The Great Oz”.  According to the sources, this not only prevented ORCA from doing its job, it also prevented any of the Rove operatives access to the program during the election process. Apparently Rove’s computer techs tried 105 times to penetrate “The Great Oz” using different means and passwords, to no avail.  Comcast finally shut down all operations under the guise of a DDOS attack threat.  Immediately after taking this action, these cyber sleuths, who called themselves “The Protectors”, turned all of the information over to the FBI.  Based on this information, if it is true, here is Good Ole Karl’s recurring nightmare:

( this photo is not real)

The same kinds of cyber activity are going on as we speak in relation to the Israeli’s attack on Gaza. Apparently over 9,000 Israeli websites belonging to government and banking systems have been attacked in the last week.  In both cases here, what was underestimated by the cabalists is the intelligence and resources of the “ignorant” masses.

As the pan EU uprisings increase, we are seeing more and more police and firemen joining the ranks of the protesters.  In Spain over the weekend, about 5,000 police officers marched through the center of Madrid on Saturday to protest salary cuts and the thinning of their ranks as Spain grapples with its sovereign debt crisis.

The officers, who had traveled from across Spain, rallied three days after the nation was gripped by a general strike over the austerity cuts. Health and education workers have already taken part in similar marches.

“Citizens! Forgive us for not arresting those truly responsible for this crisis: bankers and politicians,” read one banner held aloft by a line of officers as they marched to the interior ministry.

The rally had been called by the main policing union SUP. “Each year, between 1,500 and 2,000 police officers retire and 125 are recruited, which means in three or four years, there will be more insecurity and crime in Spain,” warned SUP general secretary Jose Maria Sanchez Fornet in a speech outside the ministry.

It would seem that real progress is beginning to correct this global economic imbalance and more and more people are beginning to believe they are not powerless to affect the changes that would begin to create global economic systems democratically based and underpinned by ethical standards more appropriate to the realities of the 21st century.

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Is It Time to Say Goodbye to Capitalism?

As we have watched the last 5-10 years unfold economically in the world, it has become intuitive to all that there is no doubt that banksters control the economy and control the world’s political realities, especially demonstrated by the effect of the Citizens United ruling on this last presidential election.  To be honest, it is not like they didn’t tell us what they were doing or planning, and it was not like we were not warned by every leader with integrity.

So why is it now we remain like passive little sheep being led into economic slavery? Are we so programmed, so lulled to sleep, that we don’t see these final trump cards being played? Are the predictions of these arrogant evil few correct in that we either don’t see what’s happening or we are so ignorant and lazy as to resist this blatant final fleecing?

Maybe it is time to just reconsider the words of both the Cabalists over the years that basically said it forthrightly and the words of the great leaders who tried so desperately to warn us.  We would have you consider the following in the chronological order these men and words were delivered to the world.

First the bankster/elites:

“The bank hath benefit of interest on all moneys which it creates out of nothing.” –  William Paterson, founder of the Bank of England, 1694.

“The few who understand the system, will either be so interested from its profits or so dependent on its favors, that there will be no opposition from that class.” – Mayer Amschel Bauer Rothschild.

“Give me control of a nation’s money and I care not who makes its laws.”
– Mayer Amschel Bauer Rothschild.

“The world is governed by very different personages from what is imagined by those who are not behind the scenes.” –– Benjamin Disraeli, First Prime Minister of England, “Coningsby, the New Generation”, 1844.

“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time, a legal system that authorizes it and a moral code that glorifies it.”
– Frederic Bastiat – (1801-1850) in Economic Sophisms.

“The division of the United States into federations of equal force was decided long before the Civil War by the high financial powers of Europe. These bankers were afraid that the United States, if they remained in one block and as one nation, would attain economic and financial independence, which would upset their financial domination over the world. The voice of the Rothschilds prevailed… Therefore they sent their emissaries into the field to exploit the question of slavery and to open an abyss between the two sections of the Union.” –  German Chancellor Otto von Bismarck.

“Those who create and issue money and credit direct the policies of government and hold in the hollow of their hands the destiny of the people.” – – Reginald McKenna, former Chancellor of Exchequer, England

“Bankers own the earth; take it away from them but leave them with the power to create credit; and, with a flick of a pen, they will create enough money to buy it back again… If you want to be slaves of bankers and pay the cost of your own slavery, then let the bankers control money and control credit.”
– Sir Josiah Stamp, Director, Bank of England, 1940.

Today, America would be outraged if U.N. troops entered Los Angeles to restore order. Tomorrow they will be grateful! This is especially true if they were told that there were an outside threat from beyond, whether real or promulgated, that threatened our very existence. It is then that all peoples of the world will plead to deliver them from this evil. The one thing every man fears is the unknown. When presented with this scenario, individual rights will be willingly relinquished for the guarantee of their well-being granted to them by the World Government.” – Henry Kissinger, Bilderberger Conference in Evians, France, 1991.

 “Some even believe we (the Rockefeller family) are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.” – David Rockefeller, Memoirs, page 405.

“We are on the verge of a global transformation. All we need is the right major crisis and the nations will accept the New World Order.”
– David Rockefeller

“We are grateful to the Washington Post, The New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years… It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is now more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries.”
– David Rockefeller, Bilderberg Meeting, June 1991 Baden, Germany.

In the next century, nations as we know it will be obsolete; all states will recognize a single, global authority. National sovereignty wasn’t such a great idea after all.”
– Strobe Talbot, President Clinton’s Deputy Secretary of State, Time Magazine, July 20th, l992.

We can’t be so fixated on our desire to preserve the rights of ordinary Americans.” – Bill Clinton, USA Today on 3/11/93, page 2a.

We also cannot assert that we haven’t been warned from the very beginnings of our nation by the very founders and subsequent truly patriotic statesmen:

“If congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to individuals or corporations.” – Andrew Jackson.

“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.” – Thomas Jefferson.

“The system of banking [is] a blot left in all our Constitutions, which, if not covered, will end in their destruction… I sincerely believe that banking institutions are more dangerous than standing armies; and that the principle of spending money to be paid by posterity… is but swindling futurity on a large scale.”
– Thomas Jefferson

“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a moneyed aristocracy that has set the Government at defiance. The issuing power should be taken from the banks and restored to the people to whom it properly belongs.” – Thomas Jefferson.

“History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.” – James Madison.

“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands, and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war.” – Abraham Lincoln – in a letter written to William Elkin.

Whoever controls the volume of money in any country is absolute master of all industry and commerce.”
– US President James A. Garfield

A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the Nation and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the world – no longer a Government of free opinion no longer a Government by conviction and vote of the majority, but a Government by the opinion and duress of small groups of dominant men…. Since I entered politics, I have chiefly had men’s views confided to me privately. Some of the biggest men in the U.S., in the field of commerce and manufacturing, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it.” – Woodrow Wilson – In The New Freedom (1913).

The Federal Reserve Bank of New York is eager to enter into close relationship with the Bank for International Settlements….The conclusion is impossible to escape that the State and Treasury Departments are willing to pool the banking system of Europe and America, setting up a world financial power independent of and above the Government of the United States….The United States under present conditions will be transformed from the most active of manufacturing nations into a consuming and importing nation with a balance of trade against it.” – Rep. Louis McFadden – Chairman of the House Committee on Banking and Currency quoted in the New York Times (June 1930).

“The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson.” – U.S. President Franklin D. Roosevelt in a letter written Nov. 21, 1933 to Colonel E. Mandell House.

“The Trilateral Commission is intended to be the vehicle for multinational consolidation of the commercial and banking interests by seizing control of the political government of the United States. The Trilateral Commission represents a skillful, coordinated effort to seize control and consolidate the four centers of power–Political, Monetary, Intellectual, and Ecclesiastical.” – U.S. Senator Barry Goldwater, his book “No Apologies”, 1964.

There are many more today who have also tried to sound the alarm, but we believe we have made the points with this sampling.

So there you have it, this insidious plan “hatched” over four hundred years ago has continued unabated and in our faces, and despite so many warnings we have failed to mount any effort to correct the problem. How does that old saying go? “First time shame on you, second time shame on me.”

So what should we do? Is it too late? Are we powerless to act? Not at all.

First we must face the fact that the continual perpetuation of these frauds will only create further problems.  Secondly we should begin the dialogue to facilitate the development and reconstruction of our society in the interests of the people through the removal of fractional banking systems.

Thirdly, we must demand the release of imprisoned and hidden technological advancements and ensure the promotion and development of these technologies in the interests of the people. These technologies will have a profound effect on our economies and living standards. Finally, we must insist that the agencies responsible for administrating the laws of this country do their job and remove the heads of the bureaucracies and banking fraternities that continue to perpetrate this fraud, forcing their hand through litigation, including class action suits by citizens.

QE3- The QE Infinite Path Off the Cliff

Last week, The Fed announced the third round of quantitative easing, the so-called QE3.  Quantitative Easing, in theory, is supposed to stimulate the economy because the Fed both prints more money and puts it into “circulation”, but also keeps interest rates low.  This is basic Keynesian Economics. So let’s take a look at how this has really been working out.

QE1 came in late 2008 under President G.W. Bush.  The Fed initiated purchases of $500 Billion of mortgage backed securities.  Remember, the bundles of bad mortgages that the banks were stuck with after the housing crash? You must remember also, this was in addition to the so-called $700 Billion bailout.

Also, in late 2008, the Fed cut the key interest rate to near zero.  By the summer of 2010, it was obvious that other than enriching the banks, QE1 had not spurred any growth in the economy.

So QE2 came in November of 2010 and lasted until June 2011.  The Fed went to buying $600 Billion in US Treasury Bills to “spur” the economy.  QE2 did NOT create any economic growth.  What QE2 DID DO was to bailout a bunch of foreign banks.  During the period of QE2, cash reserves of foreign banks went from $308 Billion to $940 Billion.  Hmmm,  ahhhh, about $600 Billion. Imagine that!

QE3 is essentially no different in the apparent approach is again to purchase mortgage backed securities, which we already know just enriches the banksters, and just tries to hide the elephant called debt.  WHAT is different about QE3 is that for the first time there is NO LIMIT to how long QE3 will go on!

Fed Chair, Ben Bernanke announced the Fed would purchase $40 Billion A MONTH in mortgage backed securities INDEFINITELY!  In addition, the Fed will keep interest rates at near zero until 2015! Truly QE Infinite!

Given that QE1 and QE2 did nothing except enrich banksters and hide debt, QE3 or QE Infinite only means that the Fed has put us on a course that only increases the size of the cliff and only slightly delays the inevitable crash of the dollar with the super-imposed hyperinflation that will flare.

Given the dollar of today only has 4 cents of the purchasing power of the dollar in 1913 when the Fed “took control” of the US monetary policy. The collapse of the dollar is real potential reality.  Already China and Russia have agreed to trade in Rubles and Yuan, instead of dollars.  India will soon follow.

There are several oil producing countries that now require dollars be converted to British Pounds or Euros, however, even this option is weakening meaning the demise of the dollar as the “petro-dollar” could be a reality in the near future.  This event alone would trigger the collapse of the dollar. This would trigger hyperinflation.

In countries experiencing hyperinflation, the central bank often prints money in larger and larger denominations as the smaller denomination notes become worthless. This can result in the production of some interesting banknotes, including those denominated in amounts of 1,000,000,000 or more.  Once it starts it can happen very quickly.  The Weimar Republic of Germany in 1923 is a very good example, as are a few others.

  • By late 1923, the Weimar Republic of Germany was issuing two-trillion Mark banknotes and postage stamps with a face value of fifty billion Mark. The highest value banknote issued by the Weimar government’s Reichsbank had a face value of 100 trillion Mark (100,000,000,000,000; 100 million million).  At the height of the inflation, one US dollar was worth 4 trillion German marks. One of the firms printing these notes submitted an invoice for the work to the Reichsbank for 32,776,899,763,734,490,417.05 (3.28 × 1019, or 33 quintillion) Marks.

  •  The largest denomination banknote ever officially issued for circulation was in 1946 by the Hungarian National Bank for the amount of 100 quintillion pengő (100,000,000,000,000,000,000, or 1020; 100 million million million) image. (There was even a banknote worth 10 times more, i.e. 1021 pengő, printed, but not issued image.) The banknotes however did not depict the numbers, “hundred million b.-pengő” (“hundred million trillion pengő”) and “one milliard b.-pengő” were spelled out instead.
  • This makes the 100,000,000,000,000 Zimbabwean dollar banknotes the note with the greatest number of zeros shown.
  • The Post-World War II hyperinflation of Hungary held the record for the most extreme monthly inflation rate ever — 41,900,000,000,000,000% (4.19 × 1016% or 41.9 quadrillion percent) for July 1946, amounting to prices doubling every 15.3 hours. By comparison, recent figures (as of 14 November 2008) estimate Zimbabwe’s annual inflation rate at 89.7 sextillion (1021) percent., which corresponds to a monthly rate of 5473%, and a doubling time of about five days. In figures, that is 89,700,000,000,000,000,000,000%.

There are those that say that that kind of event could not happen in the US.  The demand of our economy is just too large.  However, the real logic is that regardless the size of the economy, zero value is zero value, so therefore if the largest, most solid currency crashes, the global impacts are catastrophic.

So let’s rethink QE3 and let’s say the Fed will fund Education, Infrastructure in the US, and properly adjust minimum wages and social security benefits to reflect a livable wage and retirement at the rate of $40 billion a month.  I can absolutely guarantee the Fed that this would absolutely stimulate growth because it is a fact that people, both surviving on a minimum wage and those living on social security, SPEND 100% of their disposable income.  This is the direct IV line to the economy.  Just a thought.

OK Folks, When are you really going to get angry?

As we have been documenting for months, every years now is that the Federal Reserve is raping the wealth of the US and everyone is silent, no one seems to mind!  The middle class of this country lost 40% of its wealth between 2007 and 2010, and no one seems to mind.  49,000,000 people go to bed hungry every night in this nation and nobody seems to mind.  10 million people lost their homes from 2007 to 2010 and nobody cares. We have lost 90% of our manufacturing jobs and no one speaks out.

Well maybe this will light a fire under our collective asses. The GAO has just completed their not in depth first audit of the Fed and what was revealed in the audit was startling:

$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious – the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.

To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is “only” $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is “only” $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.

In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars. As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion.

“This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”- Bernie Sanders (I-VT)

When you have conservative Republican stalwarts like Jim DeMint(R-SC) and Ron Paul(R-TX) as well as self identified Democratic socialists like Bernie Sanders all fighting against the Federal Reserve, you know that it is no longer an issue of Right versus Left. When you have every single member of the Republican Party in Congress and progressive Congressmen like Dennis Kucinich sponsoring a bill to audit the Federal Reserve, you realize that the Federal Reserve is an entity onto itself, which has no oversight and no accountability.

Americans should be swelled with anger and outrage at the abysmal state of affairs when an unelected group of bankers can create money out of thin air and give it out to megabanks and supercorporations like Halloween candy. If the Federal Reserve and the bankers who control it believe that they can continue to devalue the savings of Americans and continue to destroy the US economy, they will have to face the realization that their trillion dollar printing presses will eventually plunder the world economy.

The list of institutions that received the most money from the Federal Reserve can be found on page 131of the GAO Audit and are as follows..

Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
and many many more including banks in Belgium of all places

View the 266-page GAO audit of the Federal Reserve

As we enter into the campaign season in earnest, just remember this isn’t about “saving America from liberals” or “moving forward”.  This is about putting these casino bankers in jail before they destroy life as we know it.  In fact, it may already be too late.  Just one thing to remember, the key question, who got all this money?  We want it back before this is what we call home:

The Fed’s contract expires with the US Government in 2013 and the most important campaign issue should be that there is no way in hell that contract should be renewed.  Why you haven’t even heard this come up is obvious.  There is no politician that isn’t on the Fed’s payroll one way or the other.  So the second most important issue in this election is campaign financial reform.  Again, this is not even mentioned in either party’s platform.  Don’t be duped by the meaningless issues being presented by either party.

I diligently continue to inform, but without those who read this blog passing the information forward, it is all for naught.  I have never asked for any article of mine to be made viral, but this one certainly qualifies and I humbly and respectfully ask you to make this known to everyone you know and ask them to do the same.  We need to reach 200 million people and based on the readership of this blog, that is only 4 degrees of separation. Get it. Pass it on.

The Sad Face of Banksters’ Criminality

While we all know now just how corrupt and greedy the banksters were as they precipitated the housing crisis and we have watched as nearly 4 million families have lost their homes since 2008, and those who have been displaced seem to have remained faceless.  This is the real crime.  The housing market has never really recovered and currently is still in a slump.

Countrywide Financial was one of the sub-prime lenders at the heart of the financial crisis; its predatory lending practices resulted in disgustingly large payouts for executives while sticking low-income borrowers with explosive mortgages they hadn’t a hope of paying back. The New York Times‘ Gretchen Morgenson called Countrywide, “Exhibit A for the lax and, until recently, highly lucrative lending that has turned a once-hot business ice cold and has touched off a housing crisis of historic proportions.”

Eileen Foster was an investigator in charge of Fraud Risk Management at Countrywide when the ticking time bomb of its bad loans detonated. The practices she discovered shocked her and have also shocked those who’ve heard her story—including the producers of “60 Minutes,” who asked her on the program last December to discuss the lack of prosecutions of any of the bankers responsible for the crisis. But instead of cleaning house and admitting guilt, Bank of America—which purchased Countrywide as the financial crisis grew, in what the Wall Street Journal calls “one of the worst deals ever struck in corporate America”–drove Foster out and tried to discredit her findings.

In 2011, the Department of Labor ruled that Foster had been illegally fired. It said that her firing was retaliation for her whistle-blowing and ordered that she be reinstated and paid compensation. There have still been no prosecutions, and no officials have asked to hear Foster’s story—so she’s taking it public. Earlier this year, she was honored with a Ridenhour prize for truth-telling from the Nation Institute and the Fertel Foundation.

The saddest victims of this fraud and deception have been those who have worked their entire lives to have a home to live out their retirement.  How can our Justice Department stay silent. Eric Holder should be ashamed of himself for not acting to bring these criminals to justice!

More than 1.5 million older Americans already have lost their homes, with millions more at risk as the national housing crisis takes its toll on those who are among the worst positioned to weather the storm, a new AARP report says.  Older African-Americans and Hispanics are the hardest hit.  “The Great Recession has been brutal for many older Americans,” said Debra Whitman, AARP’s policy chief. “This shows that home ownership doesn’t guarantee financial security later in life.”

Even working two jobs hasn’t been enough to allow Jewel Lewis-Hall, 57, to make her monthly mortgage payments on time. Her husband has made little money since being laid off from his job at a farmer’s market, and Lewis-Hall said her salary as a school cook falls short of what she needs to make the payments on her home in Washington.  Lewis-Hall and her husband have been making their payments late for about a year, but panic didn’t set in until recently, when the word “foreclosure” showed up in a letter from the bank.

“You’re used to living a certain way, but one thing leads to another,” Lewis-Hall said. “It’s not like I have a new car or anything. I’m driving one from 1991.”

According to AARP:

    • About 600,000 people who are 50 years or older are in foreclosure.
    • About 625,000 in the same age group are at least three months behind on their mortgages.
    • About 3.5 million — 16 percent of older homeowners — are underwater, meaning their home values have gone down and they now owe more than their homes are worth.

AARP said that over the past five years, the proportion of loans held by older Americans that are seriously delinquent jumped by more than 450 percent.  Homeowners who are younger than 50 have a higher rate of serious delinquency than their older counterparts, but the rate is increasing at a faster pace for older Americans than for younger ones, according to AARP’s analysis of more than 17 million mortgages.

Americans who are 50 or older are hard-pressed to recover from the collapse of the housing market that started in 2006 and was compounded by the recession that started in 2007. Eight in 10 own homes, but many live on fixed incomes, have little savings or have already burned through much of their retirement savings. They also have fewer working years left to build back what they may have lost.

And those who are forced to re-enter the workforce often find they can’t command the same salary that they did in the past.

RELATED LINKS

Older minorities are facing foreclosure rates that are almost double those faced by white borrowers of the same age, mirroring a nationwide trend seen in other age groups as well. Among older African-Americans, 3.5 percent were in foreclosure at the end of 2011, and the rate was 3.9 percent for Hispanics. Just 1.9 percent of white homeowners were in foreclosure.

The issue has become so dire in Rep. Elijah Cummings’ Maryland district that he has assigned one of his 20 staffers to work full time to help struggling homeowners, and his office holds regular foreclosure prevention workshops. He said the federal government can do its part by promoting principal reduction and loan modification programs.  “These are people who in many instances have never missed a payment in 20 years,” Cummings, a Democrat, said in an interview. “You see grown men crying because of the potential loss of a home.”

Among older homeowners, those who are 75 or older are in the worst shape when it comes to foreclosures, the report showed. In 2007, one out of every 300 homeowners 75 or older was in foreclosure. Five years later, about one in 30 face that same fate.

Many of those oldest homeowners may have lost income they were counting on, such as the retirement benefits of a deceased spouse. In the meantime, their mortgage payments have stayed the same.  The situation is likely to get worse before it gets better, AARP officials predicted, because of a housing market that is recovering at a snail’s pace.  “This crisis is far from over,” Whitman said. “We need to think about more creative solutions now that we have this data.”

We need to outraged by these realities.  Enough talk!  We need to demand justice. Mr. Holder, respectfully, you have all the evidence you need, how can you not act?  If you don’t have the backbone to bring these creeps to justice, then at least just declare all the mortgages illegal and give debt forgiveness to every mortgage holder over fifty as a penalty for the fraud.  You have options, please exercise them now.

Banks may be “Too Big To Fail”, But are Banksters Too Big To Jail?

As the Libor rigging scandal unfolds in the UK, it now looks like at least 20 banks world-wide have been  involved.  Iceland and now the UK are seeing and telling like it is, that this is a criminal conspiracy and those involved should be dealt with accordingly.  Let’s take a look at just ONE of the “bad boys” and review what has happened to them in the last few years. JP Morgan Chase’s “rap sheet” reads likes this:

$228 million fine of JP Morgan Chase for a bid-rigging scheme involving municipal bonds. The Chase ruling is the latest to come down in a series of fines involving a number of banks, including Bank of America and UBS. Read more: http://www.rollingstone.com/politics/blogs/taibblog/jp-morgan-chase-fine-another-slap-on-the-wrist-for-wall-street-20110708#ixzz1ztZyqSZ0

Let’s take a look at the specific details of just one of the sanctions.  This information is directly off of the Department of Treasury site. JPMorgan Chase Bank N.A. Settles Apparent Violations of Multiple Sanctions Programs: 

JPMorgan Chase Bank, N.A, New York, NY (“JPMC”) has agreed to remit $88,300,000 to settle potential civil liability for apparent violations of: the Cuban Assets Control Regulations (“CACR”), 31 C.F.R. part 515; the Weapons of Mass Destruction Proliferators Sanctions Regulations (“WMDPSR”), 31 C.F.R. part 544; Executive Order 13382, “Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters;” the Global Terrorism Sanctions Regulations (“GTSR”), 31 C.F.R. part 594; the Iranian Transactions Regulations (“ITR”), 31 C.F.R. part 560; the Sudanese Sanctions Regulations (“SSR”), 31 C.F.R. part 538; the Former Liberian Regime of Charles Taylor Sanctions Regulations (“FLRCTSR”), 31 C.F.R. part 593; and the Reporting, Procedures, and Penalties Regulations (“RPPR”), 31 C.F.R. part 501, that occurred between December 15, 2005, and March 1, 2011. This settlement covers the following apparent violations of the CACR, WMDPSR, and RPPR, which OFAC has determined were egregious:

JPMC processed 1,711 wire transfers totaling approximately $178.5 million between December 12, 2005, and March 31, 2006, involving Cuban persons in apparent violation of the CACR.  In November 2005, another U.S. financial institution alerted JPMC that JPMC might be processing wire transfers involving a Cuban national through one of its correspondent accounts.  After such notification, JPMC conducted an investigation into the wire transfers it had processed through the correspondent account.  The results of this investigation were reported to JPMC management and supervisory personnel, confirming that transfers of funds in which Cuba or a Cuban national had an interest were being made through the correspondent account at JPMC.  Nevertheless, the bank failed to take adequate steps to prevent further transfers.  JPMC did not voluntarily self-disclose these apparent violations of the CACR to OFAC.  As a result of these apparent violations, considerable economic benefit was conferred to sanctioned persons.  The base penalty for this set of apparent violations was $111,215,000.

On December 22, 2009, in apparent violation of the WMDPSR, JPMC made a trade loan valued at approximately $2.9 million to the bank issuer of a letter of credit in which the underlying transaction involved a vessel that had been identified as blocked pursuant to the WMDPSR due to its affiliation with the Islamic Republic of Iran Shipping Lines (“IRISL”).  Although JPMC supervisors and managers determined that this trade loan was likely an apparent violation of the WMDPSR and, in late December 2009, decided to submit a voluntary self-disclosure to OFAC, JPMC did not mail its voluntary self-disclosure until March 2010, three days prior to the date on which JPMC received repayment for the loan without OFAC guidance or authorization.  JPMC also failed to respond promptly and completely to an OFAC administrative subpoena seeking information on this transaction.  OFAC determined that JPMC made a voluntary self-disclosure of this apparent violation.  The base penalty for this apparent violation was $2,941,838.

The apparent violation of the RPPR occurred between November 8, 2010, and March 1, 2011.  On October 13, 2010, OFAC issued JPMC an administrative subpoena pursuant to section 501.602 of the RPPR directing JPMC to provide certain specified documents related to a specific wire transfer referencing “Khartoum.”  In response to this subpoena and a subsequent communication, JPMC compliance management failed to produce several responsive documents in JPMC’s possession, and repeatedly stated that JPMC had no additional responsive documents.  OFAC ultimately provided JPMC with a list of multiple responsive documents that OFAC had reason to believe were in JPMC’s possession based on communications with a third-party financial institution.  This prompted JPMC to correct its prior statements that the bank possessed no additional responsive documents and to produce more than 20 responsive documents.  JPMC did not voluntarily self-disclose the apparent violation of the RPPR to OFAC.  The base penalty for this apparent violation was $250,000.

In reaching its determination that the above-referenced apparent violations were egregious because of reckless acts or omissions by JPMC, OFAC considered all of the information in its possession related to these apparent violations, as well as the General Factors Affecting Administrative Action set forth in OFAC’s Economic Sanctions Enforcement Guidelines.  OFAC determined that JPMC is a very large, commercially sophisticated financial institution, and that JPMC managers and supervisors acted with knowledge of the conduct constituting the apparent violations and recklessly failed to exercise a minimal degree of caution or care with respect to JPMC’s U.S. sanctions obligations.

This settlement also covers the following apparent violations, which OFAC determined were not egregious:

Apparent violations of the ITR, GTSR, SSR, FLRCTSR, WMDPSR, and Executive Order 13382 arising out of its failure to appropriately block or reject nine wire transfers between April 27, 2006 and November 28, 2008, which totaled $609,308.  JPMC voluntarily self-disclosed five of these apparent violations to OFAC.

Apparent violations of the WMDPSR and SSR in which JPMC advised and confirmed a $2,707,432 letter of credit on April 24, 2009, in which the underlying transaction involved a vessel identified by OFAC as blocked due to its affiliation with IRISL, and a $79,308 letter of credit on January 29, 2008, involving goods destined for Sudan.  JPMC voluntarily self-disclosed these apparent violations to OFAC.

An apparent violation of the ITR consisting of a May 24, 2006 transfer of 32,000 ounces of gold bullion valued at approximately $20,560,000 to the benefit of a bank in Iran.  JPMC did not voluntarily self-disclose this matter to OFAC.

OFAC mitigated the total potential penalty based on JPMC’s substantial cooperation, including conducting an historical transaction review at OFAC’s request and entering into tolling agreements with OFAC, and the fact that OFAC had not issued a Penalty Notice or Finding of Violation against JPMC in the five years preceding the transactions at issue.  Mitigation was also extended because JPMC agreed to settle these apparent violations.

JP Morgan Chase fined $20m for mishandling Lehman Brothers funds. Government investigation finds Wall Street giant acted improperly ahead of Lehman’s collapse in 2008.  The fine is the first for a Wall Street firm related to the collapse of Lehman, the largest bankruptcy in US history. JP Morgan was a major lender to Lehman and has been under scrutiny since Lehman’s dramatic collapse on 15 September 2008. Lehman’s creditors have accused JP Morgan of siphoning off billions from the fallen bank in the days before it declared bankruptcy.  In other charges, the Commodity Futures Trading Commission (CFTC) said JP Morgan “improperly” held onto funds belonging to Lehman’s clients after the bank went bust.

JPMorgan Chase Fined $154 million in Goldman-Like Case.  JPMorgan agreed to pay $153.6 million to end a Securities and Exchange Commission suit. The SEC alleged that the New York- based bank failed to tell investors in 2007 that a hedge fund helped pick, and bet against, underlying securities in the collateralized debt obligation they purchased. In July, Goldman Sachs paid a record $550 million for failing to inform clients in 2007 that it allowed a hedge fund that also bet against housing to help.
Read more:
http://www.rollingstone.com/politics/blogs/taibblog/jpmorgan-chase-fined-154-million-in-goldman-like-case-20110622#ixzz1ztb1oS7j.

The Financial Services Authority fined one of London’s most high-profile investment bankers for alleged market abuse, the latest chapter in the U.K. regulator’s growing crackdown on insider trading.  In a statement Tuesday, the FSA said it has levied a £450,000 ($718,695) fine against Ian Hannam, a high-ranking investment banker at J.P. Morgan Chase & Co., for allegedly disclosing inside information about Heritage Oil PLC in 2008. At the time, Mr. Hannam was the lead adviser to the company, which had hired J.P. Morgan to seek a potential merger partner.

This is just a small sample of what is really going on with one of the major five.  I don’t want anyone, especially JPMC to think I have something just against them, but they are only a very visible example.  Bid Rigging, Money Laundering, Insider Trading, Bribery, Extortion have all been admitted to by JPMC and NO ONE HAS GONE TO JAIL!  WTF.  Folks, we have to wake up and realize that we cannot allow criminals running our banking system.  We must start demanding criminal sanctions for these institutions, and criminal sentences for the principles involved.  Criminal sanctions should include no Federal subsidies if convicted of a felony and loss of privilege of the backing of the Federal Reserve!

I know that we can’t get legislation passed because the banksters own the CONgress.  I know we can’t expect the regulators like the SEC will take action as their employees are either revolving door people from the banksters or they simply don’t have the resources or political support to do their job.

What to do?  DOJ and more specifically the FBI needs to start doing what we expect them to do.  We know they already have enough information from their on-going investigations.  Economists such as William Black and James Galbraith have repeatedly said, we cannot solve the economic crisis unless we throw the criminals who committed fraud in jail.

Nobel Prize winning economist George Akerlof has demonstrated that failure to punish white collar criminals – and instead bailing them out- creates incentives for more economic crimes and further destruction of the economy in the future. See this, this and this.

Nobel Prize winning economist Joseph Stiglitz just agreed. As Stiglitz told Yahoo’s Daily Finance on October 20th:

This is a really important point to understand from the point of view of our society. The legal system is supposed to be the codification of our norms and beliefs, things that we need to make our system work. If the legal system is seen as exploitative, then confidence in our whole system starts eroding. And that’s really the problem that’s going on.

So it is the FBI and DOJ that needs to hear from us to take the chance and really get interested in taking back our global banking system. So what they need to hear is a loud shout from us the people to “Let’s get this party started, do the raids.”  Look’em up, Hook’em up, and Lock’em up Boys!