Author Topic: Monetary Reform!  (Read 218656 times)

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Offline Geolibertarian

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http://www.prisonplanet.com/everyone-knows-that-the-federal-reserve-banks-are-private-except-the-american-people.html

Everyone Knows that the Federal Reserve Banks Are PRIVATE … Except the American People

Washington’s Blog
July 13, 2013

The country’s most powerful “agency” – the Federal Reserve – is actually no more federal than Federal Express.

The U.S. Supreme Court ruled in 1928:

    Instrumentalities like the national banks or the federal reserve banks, in which there are private interests, are not departments of the government. They are private corporations in which the government has an interest.

The long-time Chairman of the House Banking and Currency Committee (Charles McFadden) said on June 10, 1932:

    Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies ….

The Fed itself admitted (via Bloomberg):

    While the Fed’s Washington-based Board of Governors is a federal agency subject to the Freedom of Information Act and other government rules, the New York Fed and other regional banks maintain they are separate institutions, owned by their member banks, and not subject to federal restrictions.

For that reason, the New York Fed alleged in the lawsuit brought by Bloomberg to force the Fed to reveal some information about its loans – Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan) – that it was not subject to Federal Freedom of Information Act.

As Bloomberg reported in a separate article:

    The Federal Reserve Bank of New York … runs most of the lending programs. Most documents relevant to
[a freedom of information lawsuit filed by Bloomberg news] are at the New York Fed, which isn’t subject to FOIA law [a law which applies to Federal agencies}, according to the central bank. The Board of Governors has 231 pages of documents, to which it is denying access under an exemption for trade secrets.[/list]

San Francisco Federal Reserve research analyst David Lang confirmed in 2011:

    (Question): “I had a really quick question, the Federal Reserve Bank of San Francisco specifically, is that formed as a private corporation itself?”

    David Lang: “Ah yes it is actually. yes our state chartered banks, banks under a charter share that and we pay a dividend on those shares.”

http://www.youtube.com/watch?v=UOEOa9iraeI (SF Fed admits a private corporation, pay dividends!!!)

The senior counsel for the Federal Reserve confirmed in a court hearing in the Bloomberg lawsuit that the Federal Reserve Banks are “independent corporations”, which are “not agencies”, are “privately held”, and have “private boards of directors”.

And Federal Reserve law enforcement officers agree.

Postscript:  The Bank of International Settlements (BIS) – which is the “Central Banks’ Central Bank” – is, in turn, owned by the Fed and other central banks:

    The BIS is a closed organization owned by the 55 central banks. The heads of these central banks travel to the Basel headquarters once every two months, and the General Meeting, the BIS’s supreme executive body, takes place once a year.

So the private banks own the Fed (and other central banks), and the central banks own BIS.
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

Offline Geolibertarian

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Collateral Damage: QE3 and the Shadow Banking System
« Reply #121 on: July 24, 2013, 01:53:28 pm »
http://www.globalresearch.ca/collateral-damage-qe3-and-the-shadow-banking-system/5343591

Collateral Damage: QE3 and the Shadow Banking System

By Ellen Brown
Global Research
July 23, 2013



Rather than expanding the money supply, quantitative easing (QE) has actually caused it to shrink by sucking up the collateral needed by the shadow banking system to create credit. The “failure” of QE has prompted the Bank for International Settlements to urge the Fed to shirk its mandate to pursue full employment, but the sort of QE that could fulfill that mandate has not yet been tried.

Ben Bernanke’s May 29th speech signaling the beginning of the end of QE3 provoked a “taper tantrum” that wiped about $3 trillion from global equity markets – this from the mere suggestion that the Fed would moderate its pace of asset purchases, and that if the economy continues to improve, it might stop QE3 altogether by mid-2014. The Fed is currently buying $85 billion in US Treasuries and mortgage-backed securities per month.

The Fed Chairman then went into damage control mode, assuring investors that the central bank would “continue to implement highly accommodative monetary policy” (meaning interest rates would not change) and that tapering was contingent on conditions that look unlikely this year. The only thing now likely to be tapered in 2013is the Fed’s growth forecast.

It is a neoliberal maxim that “the market is always right,” but as former World Bank chief economist Joseph Stiglitz demonstrated, the maxim only holds when the market has perfect information. The market may be misinformed about QE, what it achieves, and what harm it can do. Getting more purchasing power into the economy could work; but QE as currently practiced may be having the opposite effect.

Unintended Consequences

The popular perception is that QE stimulates the economy by increasing bank reserves, which increase the money supply through a multiplier effect.  But as shown earlier here, QE is just an asset swap – assets for cash reserves that never leave bank balance sheets. As University of Chicago Professor John Cochrane put it in a May 23rd blog:

    QE is just a huge open market operation. The Fed buys Treasury securities and issues bank reserves instead. Why does this do anything? Why isn’t this like trading some red M&Ms for some green M&Ms and expecting it to affect your weight? . . .

    We have $3 trillion or so in bank reserves. Bank reserves can only be used by banks, so they don’t do much good for the rest of us. While the reserves may not do much for the economy, the Treasuries they remove from it are in high demand.

Cochrane discusses a May 23rd Wall Street Journal article by Andy Kessler titled “The Fed Squeezes the Shadow-Banking System,” in which Kessler argued that QE3 has backfired. Rather than stimulating the economy by expanding the money supply, it has contracted the money supply by removing the collateral needed by the shadow banking system. The shadow system creates about half the credit available to the economy but remains unregulated because it does not involve traditional bank deposits. It includes hedge funds, money market funds, structured investment vehicles, investment banks, and even commercial banks, to the extent that they engage in non-deposit-based credit creation. Kessler wrote:

    The Federal Reserve’s policy—to stimulate lending and the economy by buying Treasurys—is creating a shortage of safe collateral, the very thing needed to create credit in the shadow banking system for the private economy. The quantitative easing policy appears self-defeating, perversely keeping economic growth slower and jobs scarcer.

That explains what he calls the great economic paradox of our time:

    Despite the Federal Reserve’s vast, 4½-year program of quantitative easing, the economy is still weak, with unemployment still high and labor-force participation down. And with all the money pumped into the economy, why is there no runaway inflation? . . . The explanation lies in the distortion that Federal Reserve policy has inflicted on something most Americans have never heard of: “repos,” or repurchase agreements, which are part of the equally mysterious but vital “shadow banking system.” The way money and credit are created in the economy has changed over the past 30 years. Throw away your textbook.

Fractional Reserve Lending Without the Reserves

The post-textbook form of money creation to which Kessler refers was explained in a July 2012 article by IMF researcher Manmohan Singh titled “The (Other) Deleveraging: What Economists Need to Know About the Modern Money Creation Process.” He wrote:

    In the simple textbook view, savers deposit their money with banks and banks make loans to investors . . . . The textbook view, however, is no longer a sufficient description of the credit creation process. A great deal of credit is created through so-called “collateral chains.” We start from two principles: credit creation is money creation, and short-term credit is generally extended by private agents against collateral. Money creation and collateral are thus joined at the hip, so to speak. In the traditional money creation process, collateral consists of central bank reserves; in the modern private money creation process, collateral is in the eye of the beholder.

Like the reserves in conventional fractional reserve lending, collateral can be re-used (or rehypothecated) several times over. Singh gives the example of a US Treasury bond used by a hedge fund to get financing from Goldman Sachs. The same collateral is used by Goldman to pay Credit Suisse on a derivative position. Then Credit Suisse passes the US Treasury bond to a money market fund that will hold it for a short time or until maturity. Singh states that at the end of 2007, about $3.4 trillion in “primary source” collateral was turned into about $10 trillion in pledged collateral – a multiplier of about three. By comparison, the US M2 money supply (the credit-money created by banks via fractional reserve lending) was only about $7 trillion in 2007.  Thus credit-creation-via-collateral-chains is a major source of credit in today’s financial system.

Exiting Without Panicking the Markets

The shadow banking system is controversial. It funds derivatives and other speculative ventures that may harm the real, producing economy or put it at greater risk. But the shadow system is also a source of credit for many businesses that would otherwise be priced out of the credit market, and for such things as credit cards that we have come to rely on. And whether we approve of the shadow system or not, depriving it of collateral could create mayhem in the markets. According to the Treasury Borrowing Advisory Committee of the Securities and Financial Markets Association, the shadow system could be short as much as $11.2 trillion in collateralunder stressed market conditions. That means that if every collateral claimant tried to grab its collateral in a Lehman-like run, the whole fragile Ponzi scheme could collapse. That alone is reason for the Fed to prevent “taper tantrums” and keep the market pacified. But the Fed is under pressure from the Swiss-based Bank for International Settlements, which has been admonishing central banks to back off from their asset-buying ventures.

An Excuse to Abandon the Fed’s Mandate of Full Employment?

The BIS said in its annual report in June:

    Six years have passed since the eruption of the global financial crisis, yet robust, self-sustaining, well balanced growth still eludes the global economy. . . . Central banks cannot do more without compounding the risks they have already created. . . . {They must} encourage needed adjustments rather than retard them with near-zero interest rates and purchases of ever-larger quantities of government securities. . . . Delivering further extraordinary monetary stimulus is becoming increasingly perilous, as the balance between its benefits and costs is shifting. Monetary stimulus alone cannot provide the answer because the roots of the problem are not monetary. Hence, central banks must manage a return to their stabilization role, allowing others to do the hard but essential work of adjustment.

For “adjustment,” read “structural adjustment” – imposing austerity measures on the people in order to balance federal budgets and pay off national debts. The Fed has a dual mandate to achieve full employment and price stability. QE was supposed to encourage employment by getting money into the economy, stimulating demand and productivity. But that approach is now to be abandoned, because “the roots of the problem are not monetary.” So concludes the BIS, but the failure may not be in the theory but the execution of QE. Businesses still need demand before they can hire, which means they need customers with money to spend. QE has not gotten new money into the real economy but has trapped it on bank balance sheets. A true Bernanke-style helicopter drop, raining money down on the people, has not yet been tried.

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

Offline Geolibertarian

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http://www.infowars.com/who-controls-the-global-economy-do-not-underestimate-the-power-of-the-big-banks/

Who Controls The Global Economy? Do Not Underestimate The Power Of The Big Banks

Michael Snyder
Economic Collapse
July 25, 2013

Are the big banks really as powerful as some people say that they are?  Do they really control the global economy?  If you asked most people, they would tell you that governments control the global economy.  But the campaigns of our politicians are funded by the ultra-wealthy, the big banks and the large corporations that they control.  Others would tell you that the Federal Reserve and the rest of the central banks around the world control the global economy.  But the truth is that the Federal Reserve was established by the bankers and for the benefit of the bankers.  As you will see below, at the very core of the global economy there exists a “super-entity” of financial institutions that control an almost unimaginable amount of wealth and power.  These financial institutions and the ultra-wealthy individuals behind them are really the ones that are pulling all the strings.  In this world money equals power, and the borrower is the servant of the lender.  When you follow the pyramid all the way to the top, it begins to become very clear who really is in control.

In business schools all over America today, instead of dreaming of starting new businesses and contributing something positive to society, most business students are dreaming of going to Wall Street and getting rich.  But Wall Street doesn’t actually create or build anything of value for society.  Instead, the bankers make most of their profits by essentially pushing money and paper around.  In a recent article, Chris Martenson commented on this…

    Today, some of the most celebrated individuals and institutions are ensconced within the financial industry; in banks, hedge funds, and private equity firms. Which is odd because none of these firms or individuals actually make anything, which society might point to as additive to our living standards. Instead, these financial magicians harvest value from the rest of society that has to work hard to produce real things of real value.

    While the work they do is quite sophisticated and takes a lot of skill, very few of these firms direct capital to new efforts, new products, and new innovations. Instead they either trade in the secondary markets for equities, bonds, derivatives, and the like, which perform the ‘service’ of moving paper from one location to another while generating ‘profits.’ Or, in the case of banks, they create money out of thin air and lend it out – at interest of course.

But just because they aren’t adding much value to society does not mean that these big banks are not extremely powerful.  In fact, anyone that underestimates that power of these monolithic financial institutions is being quite foolish.

A team of researchers at the Swiss Federal Institute of Technology in Zurich studied the relationships between 37 million companies and investors worldwide, and what they found was absolutely stunning.

What they discovered is that there is a “super-entity” of just 147 very tightly knit companies that controls 40 percent of the entire network

    When the team further untangled the web of ownership, it found much of it tracked back to a “super-entity” of 147 even more tightly knit companies – all of their ownership was held by other members of the super-entity – that controlled 40 per cent of the total wealth in the network. “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network,” says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.

So exactly who are the companies that are at the core of this “super-entity”?

Well, almost all of them are banks or financial institutions.  The following is a list of the 50 “most connected” companies from the study, and the notes in parentheses are from Chris Martenson

1. Barclays plc
2. Capital Group Companies Inc (Investment Management)
3. FMR Corporation (Financial Services)
4. AXA (Investments & Life Insurance)
5. State Street Corporation (Investment Management)
6. JP Morgan Chase & Co (Bank)
7. Legal & General Group plc (Investments & Life Insurance)
8. Vanguard Group Inc (Investment Management)
9. UBS AG (Bank)
10. Merrill Lynch & Co Inc (Bank)
11. Wellington Management Co LLP (Investment Management)
12. Deutsche Bank AG (Bank)
13. Franklin Resources Inc (Investment Management)
14. Credit Suisse Group (Bank)
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp (Bank)
17. Natixis (Investment Management)
18. Goldman Sachs Group Inc (Bank)
19. T Rowe Price Group Inc (Investment Management)
20. Legg Mason Inc (Investment Management)
21. Morgan Stanley (Bank)
22. Mitsubishi UFJ Financial Group Inc (Bank)
23. Northern Trust Corporation (Investment Management)
24. Société Générale (Bank)
25. Bank of America Corporation (Bank)
26. Lloyds TSB Group plc (Bank)
27. Invesco plc (Investment mgmt) 28. Allianz SE 29. TIAA (Investments & Insurance)
30. Old Mutual Public Limited Company (Investments & Insurance)
31. Aviva plc (Insurance)
32. Schroders plc (Investment Management)
33. Dodge & Cox (Investment Management)
34. Lehman Brothers Holdings Inc* (Bank)
35. Sun Life Financial Inc (Investments & Insurance)
36. Standard Life plc (Investments & Insurance)
37. CNCE
38. Nomura Holdings Inc (Investments and Financial Services)
39. The Depository Trust Company (Securities Depository)
40. Massachusetts Mutual Life Insurance
41. ING Groep NV (Bank, Investments & Insurance)
42. Brandes Investment Partners LP (Financial Services)
43. Unicredito Italiano SPA (Bank)
44. Deposit Insurance Corporation of Japan (Owns a lot of banks’ shares in Japan)
45. Vereniging Aegon (Investments & Insurance)
46. BNP Paribas (Bank)
47. Affiliated Managers Group Inc (Owns stakes in 27 money management firms)
48. Resona Holdings Inc (Banking Group in Japan)
49. Capital Group International Inc (Investments and Financial Services)
50. China Petrochemical Group Company

Are you starting to get the idea?

The global economy truly is completely dominated by banks and other financial institutions.

In the United States, the big banks are not just content to own other companies anymore.  Now, some of our largest banks are actually starting to directly get into businesses such as “electric power production, oil refining and distribution, owning and operating of public assets such as ports and airports, and even uranium mining”.  The following is an excerpt from a letter that several members of the U.S. Congress recently sent to Federal Reserve Chairman Ben Bernanke

    We write in regards to the expansion of large banks into what had traditionally been non-financial commercial spheres. Specifically, we are concerned about how large banks have recently expanded their businesses into such fields as electric power production, oil refining and distribution, owning and operating of public assets such as ports and airports, and even uranium mining.

    Here are a few examples. Morgan Stanley imported 4 million barrels of oil and petroleum products into the United States in June, 2012. Goldman Sachs stores aluminum in vast warehouses in Detroit as well as serving as a commodities derivatives dealer. This “bank” is also expanding into the ownership and operation of airports, toll roads, and ports. JP Morgan markets electricity in California.

    In other words, Goldman Sachs, JP Morgan, and Morgan Stanley are no longer just banks – they have effectively become oil companies, port and airport operators, commodities dealers, and electric utilities as well. This is causing unforeseen problems for the industrial sector of the economy. For example, Coca Cola has filed a complaint with the London Metal Exchange that Goldman Sachs was hoarding aluminum. JP Morgan is currently being probed by regulators for manipulating power prices in California, where the “bank” was marketing electricity from power plants it controlled. We don’t know what other price manipulation could be occurring due to potential informational advantages accruing to derivatives dealers who also market and sell commodities. The long shadow of Enron could loom in these activities.

You can read the rest of their letter right here.

This week, Goldman Sachs has been facing allegations that it has cost American consumers billions of dollars by manipulating the price of aluminum.  The following is from an article that was posted on CNBC

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

Offline Geolibertarian

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http://www.prisonplanet.com/the-federal-reserve-is-bailing-out-foreign-banks-more-than-the-american-people-or-economy.html

The Federal Reserve Is Bailing Out FOREIGN Banks … More than the American People or Economy

Washington’sBlog
July 28, 2013

Federal Reserve Policy Mainly Benefits Big Foreign Banks

We’ve extensively documented that the Federal Reserve is intentionally locking up bank money so that it is not loaned out to Main Street. Specifically – due to Fed policy – 81.5% of all money created by quantitative easing is sitting there gathering dust in the form of “excess reserves” … instead of being loaned out to help Main Street or the American economy.

And we’ve extensively documented that a large percentage of the bailouts went to foreign banks (and see this and this). (A 2010 Fed audit also revealed that of the $1.25 trillion of mortgage-backed securities the central bank purchased after the housing bubble popped, some $442.7 billion -  more than 35% – were bought from foreign banks.)

It turns out that these themes are all connected.

Specifically, most of the Fed-created money which is gathering dust is actually being held by foreign banks.

The Levy Economics Institute noted in May:

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

Offline jackrobert

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Re: Monetary Reform!
« Reply #124 on: July 30, 2013, 11:59:37 pm »
This is the nice post thank  for share  this news.

Offline Geolibertarian

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Regulators Confirm The Mega Banks ARE Robbing Your Pension Funds
« Reply #125 on: August 05, 2013, 08:52:24 am »
http://www.prisonplanet.com/regulators-confirm-the-mega-banks-are-robbing-your-pension-funds.html

Regulators Confirm The Mega Banks ARE Robbing Your Pension Funds

Anthony Gucciardi
Prison Planet.com
August 5, 2013

In another case of ‘conspiracy’ confirmed as reality, US regulators are now revealing various documents and call logs detailing initiatives by the world’s mega banks to rig interest rates in order to rake in millions at the expense of legitimate businesses and pension funds.

And once again, the media is acting as if this revelation is truly inconceivable and unexpected. As it turns out, however, reports now confirm what we have known for decades: that the mega banks are in fact gutting the economy in order to squeeze as many greenbacks as possible from the last breathe of our financial infrastructure. It’s essential to remember that, as Bloomberg revealed in an attempt to obtain alternative news readers and latch on to some form of credibility, these mega banks are already receiving $83 billion from taxpayers each year.

WALL STREET FUNDING DRUG CARTELS WITH TAXPAYER INCOME

What’s amazing is the blatant and audacious nature of these mafia bankers, who are confident they can continue to siphon our cash without consequence.

But before we even get into the once again blatant siphoning of finances from pension funds and legitimate businesses, you should also be reminded where this cash is then funneled. As it turns out, the mega banks turn to Mexican drug cartels and known terrorists inside the United States in order to generate massive profits on their investments. A reality that has even been reported on by mainstream media outlets and buried within the ‘miscellaneous’ news categories with very low visibility.

NBC News, for example, has covered the admission that mega banks like HSBC are indeed funding Mexican drug cartels that continue to pump drugs into the United States. So much for the phony drug war, huh?

BANKERS ROB PENSION FUNDS, REAL BUSINESS FINANCES

These are the colossal corporations we are now entrusting to regulate and control our economy, and then we wonder why they’re obliterating the pension funds. We have given the banks the role of regulating the premiere benchmark for interest-rate derivatives. Known as ISDAfix, documents now being ‘investigated’ by the Commodity Futures Trading Commission (CFTC) explain how Wall Street bankers went in and worked with various brokers in order to alter this benchmark rate of the industry in order to profit.

Bringing down others in the process, the Wall Street sharks were on record in e-mails and phone calls discussing plans to make loads of cash on derivatives trades by altering ISDAfix rates in their favor. After all, they knew what would happen to the rates they were controlling. This is, by the way, extremely illegal and specifically prohibited in the 2010 Dodd-Frank Act. And guess what, the whole gang is involved.

In fact, the banks now being investigated for robbing pensions via the rigging of interest benchmarks now include:

     Bank of America Corp
     Barclays
     Citigroup
     Goldman Sachs Group Inc
     HSBC
     JPMorgan Chase & Co.
     Wells Fargo & Co.
     Royal Bank of Scotland
     And several others

As always, the usual suspects are up to their consistent game of looting the economy for their own gain. The usual banking mafia that operates under the love of money, power, and absolute deception. The purest form of absolute corruption there is in the whole system today.

Originally appeared at Story Leak.
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

Offline Geolibertarian

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A must-see speech by Greenback advocate, Bill Still
« Reply #126 on: August 12, 2013, 10:12:45 am »
To visitors and relative newcomers, be forewarned: if you're either a debt-money apologist from the Keynesian School of economics or a gold-money apologist from the Austrian School, you may find the following offensive:

http://www.youtube.com/watch?v=5z2wUDjeMe4 (The Global Monetary System and Mega Trends by Bill Still. 3rd Annual World Conference on Riba.)
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

Offline Geolibertarian

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Gold won't work as a Solution for Monetary Reform
« Reply #127 on: August 12, 2013, 11:21:13 pm »
Below is an excellent youtube clip (only seven minutes long) that you can show to friends and family members who are half awake -- i.e., awake enough to know that our current debt-based monetary system is in desperate need of structural reform, but who, thanks to the Austrian School propaganda machine, have fallen prey to the myth that the "solution" is to return to a gold-based system...

http://www.youtube.com/watch?v=agaozWIKnpk (Gold won't work as a Solution for Monetary Reform.)
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

Offline JT Coyoté

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Re: Monetary Reform!
« Reply #128 on: August 13, 2013, 02:40:37 am »
You know...

So do Carmack and Still...

Step one, unshackle the economy by getting back on the Constitutional wire. This will deregulate and invigorate the creative genius of the American people. Then stick a pin in the bloated political system including their media by making their Gold, Silver, and privately administered fractional fiat WORTHLESS... replacing it with a valueless medium that represents it's numerical exchange power as set by the market without interest.

Franklin, Jefferson, Jackson, and Lincoln all knew...

Without free and spontaneous production of goods and services in a FREE marketplace, with a recognized and respected medium of exchange that is at least as sound as the market it services, there is no functioning economy...

Caveat Emptor!

JTCoyoté

"Tyranny, like hell, is not easily conquered, but
we have this consolation with us, that the harder
the conflict the more glorious the triumph."

~Thomas Paine

Offline jerryweaver

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Re: Monetary Reform!
« Reply #129 on: August 13, 2013, 07:10:25 am »
Too bad the average person cannot understand this market manipulation.

http://henrymakow.com/2013/08/jpm-corners-gold-time-to-go.html

JPM Corners Gold - Time to Go Long?

August 12, 2013

Gold was manipulated down
so the Big Boys
could cover their shorts.
Now they are long.


(Editor's Note - We are not providing investment counsel but rather presenting one investor's unconventional view. Make up your own mind.)
(Editor's Note - We are not providing investment counsel but rather presenting one investor's unconventional view. Make up your own mind.) - See more at: http://henrymakow.com/2013/04/Goldbugs-Can-Expect-More-Losses.html#sthash.MDYVCwuA.dpuf

by Thom Beecham
(henrymakow.com)

Beecham is a self-employed investor and trader with 17-years trading and investing experience.

Since gold and silver plunged to their lows back in the end of June, there has not been a serious retest of those prices.

I, as a professional gold and silver trader, was anticipating this to happen, and continued trading from the short side.

However, over the past week or two, I began to analyze the order flow differently and wondered if perhaps my overall strategy should be revisited.

Specifically, I had noticed that there seemed to be a floor of support - a floor that only official intervention could provide. With some fascinating data that came out this past weekend, my intuition seems to have been proven correct.

Notice that just about everyone has been bearish on gold and silver, including me. Hedge funds and large speculators have been shorting into the market the whole time, yet they have been unsuccessful in cracking gold further.

Thus, after analyzing this weekend's important data flow, I decided to cover the remainder of my short position last night on Globex open. For the first time all year, I have actually started to trade gold from the long side, and have left my physical position unhedged.

Why? It has been determined by the COMEX Bank Participation Report that JP Morgan (JPM) has gone from being net short 50,000 COMEX gold contracts (100 oz for each contract) when gold was 1,700 to being net long 85,000+ contracts as of last week. This works out to about a 265 ton long position just on the COMEX. If JPM previously took physical delivery off the trading floor, their potential profit on a rise in gold could be much larger.

Based on total open interest, JPM has literally cornered the gold market on the long side. This completely upends the gold bear story, and could have explosive implications to the gold market going into the fall and winter months.

A position change this large cannot occur overnight. It takes months of careful trading for JPM to position itself for moves this large. I would bet JPM worked with the media to make this happen. For instance, the gold miners have begun to hedge forward production in the futures market.

Who do you think took the other side of those trades? It is safe to assume it was JPM. Basically, JPM has even fooled the miners into handing over their gold and silver at lower prices.

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Not Too Big to Jail: Why Eliot Spitzer Is Wall Street’s Worst Nightmare
« Reply #130 on: August 21, 2013, 08:43:04 am »
http://www.globalresearch.ca/not-too-big-to-jail-why-eliot-spitzer-is-wall-streets-worst-nightmare/5346230

Not Too Big to Jail: Why Eliot Spitzer Is Wall Street’s Worst Nightmare

By Ellen Brown
Global Research
August 19, 2013



Before Eliot Spitzer’s infamous resignation as governor of New York in March 2008, he was one of our fiercest champions against Wall Street corruption, in a state that had some of the toughest legislation for controlling the banks. It may not be a coincidence that the revelation of his indiscretions with a high-priced call girl came less than a month after he published a bold editorial in the Washington Post titled “Predatory Lenders’ Partner in Crime: How the Bush Administration Stopped the States from Stepping in to Help Consumers.”  The editorial exposed the collusion between the Treasury, the Federal Reserve and Wall Street in deregulating the banks in the guise of regulating them, by taking regulatory power away from the states. It was an issue of the federal government versus the states, with the Feds representing the banks and the states representing consumers.

Five years later, Spitzer has set out to take some of that local regulatory power back, in his run for New York City comptroller.  Mounting the attack against him, however, are not just Wall Street banks but women’s groups opposed to this apparent endorsement of the exploitation of women. On August 17th, the New York Post endorsed Spitzer’s opponent and ran a scathing cover story attempting to embarrass Spitzer based on the single issue of his personal life.

Lynn Parramore, who considers herself a feminist, countered in an August 8thHuffington Post article that it is likely to be in the best interests of the very women who are opposing him to forgive and move on.  His stand for women’s reproductive rights and other feminist issues is actually quite strong, and his role as Wall Street watchdog protected women from predatory financial practices. As New York Attorney General, he was known as the “Sheriff of Wall Street.” He is one of the few people with not only the insight and experience to expose Wall Street corruption but the courage to go after the perpetrators.

Targeted for Take-down

The February 2008 Washington Post article that preceded Spitzer’s political travails was written when the state attorneys general were being preempted by the Federal Reserve as watchdogs of the banks. Critics called it a case of the fox guarding the hen house. Spitzer wrote:

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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Excellent interview of Ellen Brown on RT
« Reply #131 on: August 21, 2013, 09:36:48 am »
The recent interview of Ellen Brown (author of the must-read book, Web of Debt) is between 7:02 and 20:30 of the following clip:

     http://www.youtube.com/watch?v=IvUczTYOYi4

Once you hear her accurate explanation of why (propaganda to the contrary notwithstanding) our economy is actually suffering from deflation, not inflation, you will perhaps understand more clearly why the mere mention of her name evokes so much emotional hostility from so many reactionary Austrians.
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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Making the World Safe for Banksters
« Reply #132 on: September 05, 2013, 12:18:26 pm »
http://www.counterpunch.org/2013/09/05/making-the-world-safe-for-banksters/

Making the World Safe for Banksters

Larry Summers and the System

by Ellen Brown
CounterPunch
September 05, 2013

In an August 2013 article titled “Larry Summers and the Secret ‘End-game’ Memo,” Greg Palast posted evidence of a secret late-1990s plan devised by Wall Street and U.S. Treasury officials to open banking to the lucrative derivatives business. To pull this off required the relaxation of banking regulations not just in the US but globally. The vehicle to be used was the Financial Services Agreement of the World Trade Organization.

The “end-game” would require not just coercing support among WTO members but taking down those countries refusing to join. Some key countries remained holdouts from the WTO, including Iraq, Libya, Iran and Syria. In these Islamic countries, banks are largely state-owned; and “usury” – charging rent for the “use” of money – is viewed as a sin, if not a crime. That puts them at odds with the Western model of rent extraction by private middlemen. Publicly-owned banks are also a threat to the mushrooming derivatives business, since governments with their own banks don’t need interest rate swaps, credit default swaps, or investment-grade ratings by private rating agencies in order to finance their operations.

Bank deregulation proceeded according to plan, and the government-sanctioned and -nurtured derivatives business mushroomed into a $700-plus trillion pyramid scheme. Highly leveraged,  completely unregulated, and dangerously unsustainable, it collapsed in 2008 when investment bank Lehman Brothers went bankrupt, taking a large segment of the global economy with it. The countries that managed to escape were those sustained by public banking models outside the international banking net.

These countries were not all Islamic. Forty percent of banks globally are publicly-owned. They are largely in the BRIC countries—Brazil, Russia, India and China—which house forty percent of the global population. They also escaped the 2008 credit crisis, but they at least made a show of conforming to Western banking rules. This was not true of the “rogue” Islamic nations, where usury was forbidden by Islamic teaching. To make the world safe for usury, these rogue states had to be silenced by other means. Having failed to succumb to economic coercion, they wound up in the crosshairs of the powerful US military.

Here is some data in support of that thesis.

The End-game Memo

In his August 22nd article, Greg Palast posted a screenshot of a 1997 memo from Timothy Geithner, then Assistant Secretary of International Affairs under Robert Rubin, to Larry Summers, then Deputy Secretary of the Treasury. Geithner referred in the memo to the “end-game of WTO financial services negotiations” and urged Summers to touch base with the CEOs of Goldman Sachs, Merrill Lynch, Bank of America, Citibank, and Chase Manhattan Bank, for whom private phone numbers were provided.

The game then in play was the deregulation of banks so that they could gamble in the lucrative new field of derivatives. To pull this off required, first, the repeal of Glass-Steagall, the 1933 Act that imposed a firewall between investment banking and depository banking in order to protect depositors’ funds from bank gambling. But the plan required more than just deregulating US banks. Banking controls had to be eliminated globally so that money would not flee to nations with safer banking laws. The “endgame” was to achieve this global deregulation through an obscure addendum to the international trade agreements policed by the World Trade Organization, called the Financial Services Agreement. Palast wrote:

Until the bankers began their play, the WTO agreements dealt simply with trade in goods–that is, my cars for your bananas.  The new rules ginned-up by Summers and the banks would force all nations to accept trade in “bads” – toxic assets like financial derivatives.

Until the bankers’ re-draft of the FSA, each nation controlled and chartered the banks within their own borders.  The new rules of the game would force every nation to open their markets to Citibank, JP Morgan and their derivatives “products.”

And all 156 nations in the WTO would have to smash down their own Glass-Steagall divisions between commercial savings banks and the investment banks that gamble with derivatives.

The job of turning the FSA into the bankers’ battering ram was given to Geithner, who was named Ambassador to the World Trade Organization.

WTO members were induced to sign the agreement by threatening their access to global markets if they refused; and they all did sign, except Brazil. Brazil was then threatened with an embargo; but its resistance paid off, since it alone among Western nations survived and thrived during the 2007-2009 crisis. As for the others:

    The new FSA pulled the lid off the Pandora’s box of worldwide derivatives trade.  Among the notorious transactions legalized: Goldman Sachs (where Treasury Secretary Rubin had been Co-Chairman) worked a secret euro-derivatives swap with Greece which, ultimately, destroyed that nation.  Ecuador, its own banking sector de-regulated and demolished, exploded into riots.  Argentina had to sell off its oil companies (to the Spanish) and water systems (to Enron) while its teachers hunted for food in garbage cans.  Then, Bankers Gone Wild in the Eurozone dove head-first into derivatives pools without knowing how to swim–and the continent is now being sold off in tiny, cheap pieces to Germany.

The Holdouts

That was the fate of countries in the WTO, but Palast did not discuss those that were not in that organization at all, including Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran. These seven countries were named by U.S. General Wesley Clark (Ret.) in a 2007 “Democracy Now” interview as the new “rogue states” being targeted for take down after September 11, 2001. He said that about 10 days after 9-11, he was told by a general that the decision had been made to go to war with Iraq. Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.

What did these countries have in common? Besides being Islamic, they were not members either of the WTO or of the Bank for International Settlements (BIS). That left them outside the long regulatory arm of the central bankers’ central bank in Switzerland. Other countries later identified as “rogue states” that were also not members of the BIS included North Korea, Cuba, and Afghanistan.

The body regulating banks today is called the Financial Stability Board (FSB), and it is housed in the BIS in Switzerland. In 2009, the heads of the G20 nations agreed to be bound by rules imposed by the FSB, ostensibly to prevent another global banking crisis. Its regulations are not merely advisory but are binding, and they can make or break not just banks but whole nations. This was first demonstrated in 1989, when the Basel I Accord raised capital requirements a mere 2%, from 6% to 8%. The result was to force a drastic reduction in lending by major Japanese banks, which were then the world’s largest and most powerful creditors. They were undercapitalized, however, relative to other banks. The Japanese economy sank along with its banks and has yet to fully recover.

Among other game-changing regulations in play under the FSB are Basel III and the new bail-in rules. Basel III is slated to impose crippling capital requirements on public, cooperative and community banks, coercing their sale to large multinational banks.

The “bail-in” template was first tested in Cyprus and follows regulations imposed by the FSB in 2011. Too-big-to-fail banks are required to draft “living wills” setting forth how they will avoid insolvency in the absence of government bailouts. The FSB solution is to “bail in” creditors – including depositors – turning deposits into bank stock, effectively confiscating them.

The Public Bank Alternative

Countries laboring under the yoke of an extractive private banking system are being forced into “structural adjustment” and austerity by their unrepayable debt. But some countries have managed to escape. In the Middle East, these are the targeted “rogue nations.” Their state-owned banks can issue the credit of the state on behalf of the state, leveraging public funds for public use without paying a massive tribute to private middlemen. Generous state funding allows them to provide generously for their people.

Like Libya and Iraq before they were embroiled in war, Syria provides free education at all levels and free medical care. It also provides subsidized housing for everyone (although some of this has been compromised by adoption of an IMF structural adjustment program in 2006 and the presence of about 2 million Iraqi and Palestinian refugees). Iran too provides nearly free higher education and primary health care.

Like Libya and Iraq before takedown, Syria and Iran have state-owned central banks that issue the national currency and are under government control. Whether these countries will succeed in maintaining their financial sovereignty in the face of enormous economic, political and military pressure remains to be seen.

As for Larry Summers, after proceeding through the revolving door to head Citigroup, he became State Senator Barack Obama’s key campaign benefactor. He played a key role in the banking deregulation that brought on the current crisis, causing millions of US citizens to lose their jobs and their homes. Yet Summers is President Obama’s first choice to replace Ben Bernanke as Federal Reserve Chairman. Why? He has proven he can manipulate the system to make the world safe for Wall Street; and in an upside-down world in which bankers rule, that seems to be the name of the game.
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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We interrupt this latest false flag distraction to bring you THIS!
« Reply #133 on: September 17, 2013, 02:21:45 am »
http://truth-out.org/news/item/9430-out-of-the-mouths-of-babes-video-of-12-year-old-money-reformer-tops-a-million-views

A Monetary Policy for the 99%: Twelve-Year-Old Reformer Goes Viral

By Ellen Brown
Truthout
May 29, 2012

The YouTube video of 12-year-old Victoria Grant speaking at the Public Banking in America conference last month has gone viral, topping a million views on various web sites.

     http://www.youtube.com/watch?v=Bx5Sc3vWefE

10 year old explains the truth about where money comes from...

       http://www.youtube.com/watch?v=bmR4qtEdu0I

If pre-teen girls can understand both how our debt-based money system works and why we desperately need to replace it with a debt-free system, why can't the average adult male?

Time to put the toys away, grow up, and focus on the things that really matter, guys! Yes, that means you too, Beavis!
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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Re: NSA Economic Espionage on BRICS
« Reply #134 on: September 17, 2013, 09:41:56 am »
We need a stupid tax just for the willfully ignorant. Oh, that is what the Federal Reserve system is. A stupid tax for stupid people.

Keiser Report #498 - James Clapper on NSA Economic Espionage on BRICS - WORLD WAR MONEY

haven't checked out RT's Keiser Report for a while but Stacey and Max are still banging out their radical opinions on the WAR WORLD we all inhabit, for PROFIT.

This time they discuss Economic Espionage and, perhaps, Sabotage by the NSA against the corporations and innovators of competitor (BRICS) nations. Which kinda ties in with the Bank of England attempt to cap house price appreciation to 5% putting the breaks on the amount you can lend. What free market?

In the second half, Max interviews author, journalist and filmmaker, Greg Palast of GregPalast.com, about the Larry Summers’ secret ‘End Game’ memo and the decriminalization of what were once financial crimes.

VIDEO HERE...  http://rt.com/shows/keiser-report/episode-498-max-keiser-929/

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Re: Monetary Reform!
« Reply #135 on: September 17, 2013, 12:07:51 pm »
10 year old explains the truth about where money comes from...

       http://www.youtube.com/watch?v=bmR4qtEdu0I

If pre-teen girls can understand both how our debt-based money system works and why we desperately need to replace it with a debt-free system, why can't the average adult male?

Time to put the toys away, grow up, and focus on the things that really matter, guys! Yes, that means you too, Beavis!

25 Fast Facts About The Federal Reserve – Please Share With Everyone You Know
 By Michael Snyder, on September 15th, 2013

The reason they can't understand The Uncle Sam SCAM is fear.

 The Fed is the biggest Ponzi scheme in the history of the world, and if the American people truly understood how it really works, they would be screaming for it to be abolished immediately.  The following are 25 fast facts about the Federal Reserve that everyone should know...

http://theeconomiccollapseblog.com/archives/25-fast-facts-about-the-federal-reserve-please-share-with-everyone-you-know


"I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain.”


― Frank Herbert, Dune

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5 Years After Financial Crisis, Mega-Banks Still Committing Massive Crimes
« Reply #136 on: September 20, 2013, 11:00:17 am »
While neo-fascist Republicans are busy cutting food stamps, we have the following going on in the background...

http://www.prisonplanet.com/5-years-after-the-financial-crisis-the-big-banks-are-still-committing-massive-crimes.html

5 Years After the Financial Crisis, The Big Banks Are Still Committing Massive Crimes

Washington’s Blog
September 20, 2013

Preface: Not all banks are criminal enterprises. The wrongdoing of a particular bank cannot be attributed to other banks without proof. But – as documented below – many of the biggest banks have engaged in unimaginably bad behavior.

You Won’t Believe What They’ve Done …

Here are just some of the improprieties by big banks over the last century (you’ll see that many shenanigans are continuing today):

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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Re: Monetary Reform!
« Reply #138 on: September 20, 2013, 03:08:09 pm »
Take a look at this:
http://forum.prisonplanet.com/index.php?topic=250580.0


btw, the only REAL REFORM will be to shut down the PRIVATE, ARROGANT AND UNACCOUNTABLE FEDERAL RESERVE AND THEIR CENTRAL BANKING SYSTEM OF FRAUD, GREED AND DESTRUCTION!
Don't believe me. Look it up yourself!

Offline Geolibertarian

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Re: Monetary Reform!
« Reply #139 on: September 20, 2013, 03:58:46 pm »
btw, the only REAL REFORM will be to shut down the PRIVATE, ARROGANT AND UNACCOUNTABLE FEDERAL RESERVE AND THEIR CENTRAL BANKING SYSTEM OF FRAUD, GREED AND DESTRUCTION!

As I've explained countless times before (and will undoubtedly have to explain again), fractional reserve banking -- and the usury-driven debt slavery to which it inevitably gives rise -- were around long before the Fed. Thus, "ending" the latter doesn't necessarily mean "ending" the former. In fact, to merely end the latter would be the equivalent of cutting a weed off at ground level: by leaving the root intact, one only ensures it will sprout right back up again, only worse than before. (Anyone who's seen The Money Masters knows what I'm talking about.)

I know that doesn't fit on a bumper sticker, but we nevertheless ignore this fact at our peril.
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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Is Homeland Tyranny Preparing for the Next Wall Street Collapse?
« Reply #140 on: October 07, 2013, 04:29:00 pm »
http://www.globalresearch.ca/martial-law-and-the-economy-is-homeland-security-preparing-for-the-next-wall-street-collapse/5353267

Martial Law and the Economy: Is Homeland Security Preparing for the Next Wall Street Collapse?

By Ellen Brown
Global Research
October 07, 2013



Reports are that the Department of Homeland Security (DHS) is engaged in a massive, covert military buildup. An article in the Associated Press in February confirmed an open purchase order by DHS for 1.6 billion rounds of ammunition. According to an op-ed in Forbes, that’s enough to sustain an Iraq-sized war for over twenty years. DHS has also acquired heavily armored tanks, which have been seen roaming the streets. Evidently somebody in government is expecting some serious civil unrest. The question is, why?

Recently revealed statements by former UK Prime Minister Gordon Brown at the height of the banking crisis in October 2008 could give some insights into that question. An article on BBC News on September 21, 2013, drew from an explosive autobiography called Power Trip by Brown’s spin doctor Damian McBride, who said the prime minister was worried that law and order could collapse during the financial crisis. McBride quoted Brown as saying:

    If the banks are shutting their doors, and the cash points aren’t working, and people go to Tesco {a grocery chain} and their cards aren’t being accepted, the whole thing will just explode.

    If you can’t buy food or petrol or medicine for your kids, people will just start breaking the windows and helping themselves.

    And as soon as people see that on TV, that’s the end, because everyone will think that’s OK now, that’s just what we all have to do. It’ll be anarchy. That’s what could happen tomorrow.

How to deal with that threat? Brown said, “We’d have to think: do we have curfews, do we put the Army on the streets, how do we get order back?”

McBride wrote in his book Power Trip, “It was extraordinary to see Gordon so totally gripped by the danger of what he was about to do, but equally convinced that decisive action had to be taken immediately.” He compared the threat to the Cuban Missile Crisis.

Fear of this threat was echoed in September 2008 by US Treasury Secretary Hank Paulson, who reportedly warned that the US government might have to resort to martial law if Wall Street were not bailed out from the credit collapse.

In both countries, martial law was avoided when their legislatures succumbed to pressure and bailed out the banks. But many pundits are saying that another collapse is imminent; and this time, governments may not be so willing to step up to the plate.

The Next Time WILL Be Different

What triggered the 2008 crisis was a run, not in the conventional banking system, but in the “shadow” banking system, a collection of non-bank financial intermediaries that provide services similar to traditional commercial banks but are unregulated. They include hedge funds, money market funds, credit investment funds, exchange-traded funds, private equity funds, securities broker dealers, securitization and finance companies. Investment banks and commercial banks may also conduct much of their business in the shadows of this unregulated system.

The shadow financial casino has only grown larger since 2008; and in the next Lehman-style collapse, government bailouts may not be available. According to President Obama in his remarks on the Dodd-Frank Act on July 15, 2010, “Because of this reform, . . . there will be no more taxpayer funded bailouts – period.”

Governments in Europe are also shying away from further bailouts. The Financial Stability Board (FSB) in Switzerland has therefore required the systemically risky banks to devise “living wills” setting forth what they will do in the event of insolvency. The template established by the FSB requires them to “bail in” their creditors; and depositors, it turns out, are the largest class of bank creditor. (For fuller discussion, see my earlier article here.)

When depositors cannot access their bank accounts to get money for food for the kids, they could well start breaking store windows and helping themselves. Worse, they might plot to overthrow the financier-controlled government. Witness Greece, where increasing disillusionment with the ability of the government to rescue the citizens from the worst depression since 1929 has precipitated riots and threats of violent overthrow.

Fear of that result could explain the massive, government-authorized spying on American citizens, the domestic use of drones, and the elimination of due process and of “posse comitatus” (the federal law prohibiting the military from enforcing “law and order” on non-federal property). Constitutional protections are being thrown out the window in favor of protecting the elite class in power.

The Looming Debt Ceiling Crisis

The next crisis on the agenda appears to be the October 17th deadline for agreeing on a federal budget or risking default on the government’s loans. It may only be a coincidence, but two large-scale drills are scheduled to take place the same day, the “Great ShakeOut Earthquake Drill” and the “Quantum Dawn 2 Cyber Attack Bank Drill.” According to a Bloomberg news clip on the bank drill, the attacks being prepared for are from hackers, state-sponsored espionage, and organized crime (financial fraud). One interviewee stated, “You might experience that your online banking is down . . . . You might experience that you can’t log in.” It sounds like a dress rehearsal for the Great American Bail-in.

Ominous as all this is, it has a bright side. Bail-ins and martial law can be seen as the last desperate thrashings of a dinosaur. The exploitative financial scheme responsible for turning millions out of their jobs and their homes has reached the end of the line. Crisis in the current scheme means opportunity for those more sustainable solutions waiting in the wings.

Other countries faced with a collapse in their debt-based borrowed currencies have survived and thrived by issuing their own. When the dollar-pegged currency collapsed in Argentina in 2001, the national government returned to issuing its own pesos; municipal governments paid with “debt-canceling bonds” that circulated as currency; and neighborhoods traded with community currencies. After the German currency collapsed in the 1920s, the government turned the economy around in the 1930s by issuing “MEFO” bills that circulated as currency. When England ran out of gold in 1914, the government issued “Bradbury pounds” similar to the Greenbacks issued by Abraham Lincoln during the US Civil War.

Today our government could avoid the debt ceiling crisis by doing something similar: it could simply mint some trillion dollar coins and deposit them in an account. That alternative could be pursued by the Administration immediately, without going to Congress or changing the law, as discussed in my earlier article here. It need not be inflationary, since Congress could still spend only what it passed in its budget. And if Congress did expand its budget for infrastructure and job creation, that would actually be good for the economy, since hoarding cash and paying down loans have significantly shrunk the circulating money supply.

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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Sequesters, Shutdowns and Defaults
« Reply #141 on: October 12, 2013, 10:53:16 am »
You know what Austrians and Keynesians (despite being supposed "opposites") have in common? They both hate articles like the following...

http://www.huffingtonpost.com/stephen-zarlenga/sequesters-shutdowns-and-_b_4086071.html

Sequesters, Shutdowns and Defaults

Stephen Zarlenga
The Huffington Post
Oct. 11, 2013

Never in 225 years has the full faith and credit of the United States been held to ransom. But also never in 225 years has a solution been ready that can resolve this problem: the monetary reform bill HR2990 introduced into the 112th Congress by Dennis Kucinich.

For the 95th time in the last 67 years, Congress and the president are confronted with passing legislation to raise the "debt ceiling."

What citizens should know is that our country can pay off its debt as it comes due; can put millions of people back to work rebuilding our crumbling infrastructure; can provide debt-free federal support for cash-strapped State governments, and end the so called great recession by putting cash in the hands of all our citizens through a citizens dividend. This gives small businesses what they need most - customers with cash to spend on their goods and services. All these things are made possible by the HR 2990 bill introduced by Dennis Kucinich and co-sponsored by John Conyers.

The bill accomplishes this by adjusting our money system from one of "debt money created by banks" when they make loans, to one of "money by law" created as money, not as debt, by our government. That power is already vested in Congress by the Constitution; "The Congress shall have the Power To... coin Money, regulate the Value thereof..." {Article 1, Section 8}.

Congressmen should re-introduce and pass H.R. 2990, The National Emergency Employment Defense Act (NEED) that Congressmen Kucinich and Conyers sponsored in the last Congress.

The banking class and their economists have spread confusion over the nature of money. The confusion is largely responsible for the present misdirection of our leaders. So they allow the destruction of the American middle class, and of our democracy, our privacy and civil liberties. Even the planet is now threatened by degradation of Earth's environment.

Throughout our history, great leaders such as Benjamin Franklin, John Adams, Thomas Jefferson, Andrew Jackson, Martin Van Buren, Wright Patman, Henry Gonzalez and Dennis Kucinich have confronted banks over the main question in our nations past: Who should have the power to create money - the banks for the enrichment of their "elite" owners, or the people through their elected representatives, to promote the general welfare and benefit our entire society.

Congress squabbles but the present system just can't relieve or solve the problem -- because the debt money system itself is the problem!

How The NEED Act Solves the Problem in 3 major steps:

1) The Federal Reserve is incorporated into our government, where people think it is now. A new Monetary Authority is established to avoid both inflation and deflation.

2) Simple accounting rule changes will prohibit banks from creating what we use for money by decisively ending fractional reserve lending. Banks would lend real money they have or receive from savers. This is what people think happens now.

3) Government creates and spends new money into circulation for infrastructure, education and health care; starting with the $2.2 trillion the engineers say we need to make our infrastructure safe, over the next 5 years. This alone will create over 7 million good jobs quickly.

Additionally: The national debt gets paid off as it comes due. If we continued with a "debt-money" system, we could never pay off the debt. The NEED Act provides a tax free Dividend to get money into the hands of all our citizens; and has a provision where 25 percent of new money created each year is granted on a per capita basis to the states for their pressing needs.

The NEED Act begins to heal a great injustice that has been perpetrated on the world's peoples. All the world's great religions have struggled to reconcile monetary policy with the problem of usury. Concepts for the NEED Act originate in Stephen Zarlenga's highly acclaimed The Lost Science of Money book which studies 3,000 years of monetary history, incorporating the perspective of social justice and fairness. Learning from Aristotle, Aquinas, the Scholastic Scholars of the Middle Ages, Alexander Del Mar and some modern thinkers, the problem of "usury" is properly defined as "the taking of something for nothing through the structural misuse of the monetary mechanism." That's what is happening now on a worldwide scale

What has our "debt-money created by banks" system done for us? We have suffered austerity, sequestration, government shutdowns, and economic depression with a real unemployment rate over 20 percent. Millions more who are working are not being paid enough for life's basic necessities, and 8 million families have been thrown out of their homes! We have even been attacked from within by threats to default on the full faith and credit of the United States. All this is utterly unacceptable. The monetary system must be changed.

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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Answering Peter Schiff
« Reply #142 on: October 18, 2013, 01:44:17 pm »
Yet another example of how liberating it is to be free from the intellectual prison that is the ridiculously false Austrian-vs.-Keynesian paradigm...

     http://www.youtube.com/watch?v=XJBAje4d8LY (Answering Peter Schiff)
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

Offline Geolibertarian

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The Essence Of The Banking Industry
« Reply #143 on: November 06, 2013, 05:18:11 pm »
https://www.youtube.com/watch?v=2B_SxGmSJP0 (The Essence Of The Banking Industry)


"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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http://www.globalresearch.ca/former-fed-officials-on-quantitative-easing-a-feast-for-wall-street-legalized-bank-robbery-and-high-grade-monetary-heroin/5358206

Former Fed Officials on Quantitative Easing: “A Feast for Wall Street”, “Legalized Bank Robbery” and “High Grade Monetary Heroin”

By Stephen Lendman
Global Research
November 15, 2013



Andrew Huszar is a former Fed official. In 2009 and 2010, he managed its $1.25 trillion mortgaged-backed security purchase program.

He’s a former Morgan Stanley managing director. He’s currently a Rutgers Business School senior fellow. He’s a QE confessor.

He witnessed Bernanke’s scam up close and personal. It benefits Wall Street. It ignores Main Street. Bernanke planned it that way.

Investopedia calls QE “monetary policy used to increase the money supply by buying government securities or other securities from the market.”

It’s supposed to “increase the money supply by flooding financial institutions with capital, in an effort to promote increased lending and liquidity.”

According to Ellen Brown, QE contracted the money supply. It did so “by sucking up the collateral needed by the shadow banking system to create credit.”

It’s just an “asset swap.” Assets for cash reserves “never leave bank balance sheets.”

QE is counterproductive. It’s self-defeating. It constrains economic growth. It doesn’t create jobs. It benefits Wall Street at the expense of Main Street.

It works when used constructively. Money injected responsibly into the economy creates growth. It creates jobs. When people have money they spend it.

A virtuous cycle of prosperity is possible. America once was sustainably prosperous. Today it’s heading for a slow-motion train wreck.

Former Reagan administration Office of Management and Budget Director David Stockman calls QE “high grade monetary heroin.”

One day, it’ll “kill the patient,” he says. It’s the closest thing to “legalized bank robbery.” It robs poor Peter to benefit rich Paul. It’s recklessly out-of-control.

Dallas Fed president Richard Fisher agrees with Stockman. “QE can’t go on forever because (it’ll) kill the patient,” he said.

Bernanke, Yellen and other Fed governors apparently disagree. Pedal to the metal QE defines Fed policy.

What can’t go on forever, won’t. The longer bad policy continues, the worse the stiff result when it ends.

Reckless Fed policy was initiated. It continues out-of-control. Huszar apologized. On November 11, he headlined his Wall Street Journal op-ed “Confessions of a Quantitative Easier.” He began saying:

“I can only say: I’m sorry, America.”

“As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing.”

“The central bank continues to spin QE as a tool for helping Main Street.”

Baloney! Bernanke and other Fed governors lied. The Fed isn’t federal. It’s privately owned. Major banks run it. They control policy.

Wall Street’s infested with criminals. Grand theft is official policy. Corporate crooks aren’t prosecuted. Money power runs America. Major Wall Street banks do most of all.

They play by their own rules. They control Fed policy. Money printing madness enriches them. It does so at the expense of Main Street.

On Wall Street, past is prologue. New scams follow old ones. Washington acts as facilitator. Regulators look the other way. Business as usual continues.

Bernanke is Wall Street’s hired hand. So is Janet Yellen. She’ll replace him when he steps down in January.

On November 14, she testified before the Senate Banking, Housing and Urban Affairs Committee. She lied saying “the economy is significantly stronger and continues to improve.”

She ignored a protracted Main Street Depression. She lied again saying “the Federal Reserve is using its monetary policy tools to promote a more robust recovery.”

Huszar exposed her saying he came “to recognize (QE) for what it really is: the greatest backdoor Wall Street bailout of all time.”

“We went on a bond-buying spree,” he said. It was sold as a way to help Main Street. “Instead it was a feast for Wall Street.”

It’s part of the greatest ever wealth transfer from ordinary people to banks, other corporate favorites and rich elites.

Since 2009, the world’s billionaires doubled their wealth. Their numbers grew from 1,360 in 2009 to 2,170 in 2013.

Their collective $6.5 trillion wealth nearly matches China’s GDP. It’s the world’s second largest economy.

Banks, super-rich elites, and other high net worth investors feasted on easy money. It’s like shooting fish in a barrel. They borrow nearly interest free.

They invest for exponential returns. They do what mere mortals can’t. Some, perhaps many, get inside information. Market manipulation adds greater wealth.

Yellen knows. She explained nothing. She lied on Capitol Hill. As Fed chairman next year, she promised to continue the scam.

Money printing madness substitutes for stimulative growth polices. Bernanke helped engineer the greatest wealth transfer in history.

America’s 1% never had it better. Banks, major corporations, big investors, and high net worth individuals alone benefitted. They did so at the expense of ordinary Americans.

Unemployment, poverty, homelessness, hunger and overall human needs are at Depression era levels.

Manipulative, destructive Fed policy is largely to blame. Obama and Capitol Hill share it.

When finance capital prospers at the expense of ordinary people, economies are hollowed out and wrecked. Neofeudalism follows.

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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Still Report #126 - Feds Love Bitcoins
« Reply #145 on: November 19, 2013, 09:35:59 am »
https://www.youtube.com/watch?v=ipGIOip5zc4 (Still Report #126 - Feds Love Bitcoins)


^^ Makes one wonder who the Bitcoin groupies at Zero Hedge really work for, does it not?
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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Re: Monetary Reform!
« Reply #146 on: November 20, 2013, 06:28:49 pm »
Hi Geo.
        Question, admittedly I'm a mung when it comes to monetary issues.
          That said: Do you have a bottom line solution in mind, explained in simple terms.
             
                 P.S. I go along with your feelings about Randy..

Offline Geolibertarian

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Re: Monetary Reform!
« Reply #147 on: November 23, 2013, 01:34:03 am »
Hi Geo.
        Question, admittedly I'm a mung when it comes to monetary issues.
          That said: Do you have a bottom line solution in mind, explained in simple terms.

*  Permanently delink the creation of new money from the "lending" of it.

*  Allow the government issuance of new money to finance only (a) the production and renovation of public infrastructure (roads, bridges, etc.), and (b) a "National Dividend."


For details, simply read all previous posts to this thread (particularly the first two pages).  8)
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

EvadingGrid

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Re: Monetary Reform!
« Reply #148 on: November 25, 2013, 10:32:01 am »
Hi Geo.
        Question, admittedly I'm a mung when it comes to monetary issues.
          That said: Do you have a bottom line solution in mind, explained in simple terms.
             
                 P.S. I go along with your feelings about Randy..

Watching the Money As Debt video more than once, its a great way to comprehend the money creation fraud.

Anyone who truly grasps the creation of money, should be able to spot flaws in fake solutions.

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Government Excuses for Letting the Banksters Off Scot-Free Are Bogus
« Reply #149 on: November 25, 2013, 11:49:15 am »
http://www.washingtonsblog.com/2013/11/top-judge.html

Government Excuses for Letting the Banksters Off Scot-Free Are Bogus

The Failure To Punish Wall Street Criminals Is The Core Cause Of Our Sick Economy

By Washington's Blog
November 22, 2013

U.S. Attorney General Eric Holder said:

I am concerned that the size of some of these institutions [banks] becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.

As we’ve repeatedly noted, this is wholly untrue.

If the big banks were important to the economy, would so many prominent economists, financial experts and bankers be calling for them to be broken up?

If the big banks generated prosperity for the economy, would they have to be virtually 100% subsidized to keep them afloat?

If the big banks were helpful for an economic recovery, would they be prolonging our economic instability?

In fact, failing to prosecute criminal fraud has been destabilizing the economy since at least 2007 … and will cause huge crashes in the future.

After all, the main driver of economic growth is a strong rule of law.

Nobel prize winning economist Joseph Stiglitz says that we have to prosecute fraud or else the economy won’t recover:

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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Re: Monetary Reform!
« Reply #150 on: November 25, 2013, 12:06:02 pm »
John Perkins "Confessions of an Economic Hitman"

http://www.youtube.com/watch?v=aqIHKWd9rSc

Using the banks to cause a depression then martial law is all part of the Globalists' plans per John Perkins.

http://www.youtube.com/watch?v=JybgST8A8ns

http://www.youtube.com/watch?v=AeGTV6fvgaM

Back in 1985 I watched the same GI Joe episode too....

Yet amazingly you can't wake many Americans up to this.

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The Truth About Deflation
« Reply #151 on: December 16, 2013, 07:19:15 am »
http://www.counterpunch.org/2013/12/13/the-truth-about-deflation/

The Truth About Deflation

It's Closer Than You Think

by Mike Whitney
CounterPunch
December 13, 2013

“We are on the eve of a deflationary shock which will likely reduce equity valuations from very high to very low levels…..it is increasingly likely that one event will be the catalyst to very rapidly change inflationary into deflationary expectations. Indeed, when key prices are already falling across the globe, one should expect one key major credit event to occur.” Russell Napier, “An Ill Wind”, CLSA, selected excerpts, zero hedge.

Deflationary pressures are greater today than anytime since the end of the recession in March 2009.

In September 2011 the annual rate of inflation was 3.9 percent. At present, the rate is just 1.0 percent and trending lower. Inflation has continued to fall despite five years of zero interest rates and 3 rounds of quantitative easing. For all practical purposes, the Fed’s large-scale asset purchases (LSAP) have had no impact on inflation at all, in fact, some analysts believe the Fed’s polices may be counterproductive. Take a look at this from Stephen Williamson’s New Monetarist Economics blog:

    “Back in days of yore, my concern was that we could indeed get higher inflation. How? I had thought that the Fed had the ability to control inflation, but when push came to shove, they wouldn’t do it. Once people caught on to that idea, we could get on a high-inflation path that was self-sustaining. Of course, since I said that, I’ve continued to work on these problems, and stuff has been happening. In particular, we’re not seeing that high-inflation path. How come?…

    …with the nominal interest rate effectively at the zero lower bound, the rate of inflation is being determined primarily by the liquidity premium on government debt. Once we recognize that, it’s not surprising that the inflation rate has been falling for the last three years…

    …In general, if we think that inflation is being driven by the liquidity premium on government debt at the zero lower bound, then if the Fed keeps the interest rate on reserves where it is for an extended period of time, we should expect less inflation rather than more…

The Fed is stuck. It is committed to a future path for policy, and going back on that policy would require that people at the top absorb some new ideas, and maybe eat some crow. Not likely to happen.” (“Liquidity Premia and the Monetary Policy Trap“, Stephen Williamson, New Monetarist Economics blog):

     

Williamson is not alone in his belief that the Fed is on the wrong track. Economist Warren Mosler arrives at the same conclusion although there are notable differences in their analysis. Here’s a short clip from an article by Mosler which wraps it up in one paragraph:

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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100 Years Is Enough: Time to Make the Federal Reserve a Public Utility
« Reply #152 on: December 23, 2013, 08:38:43 am »
http://www.globalresearch.ca/one-hundred-years-is-enough-time-to-make-the-federal-reserve-a-public-utility/5362475

One Hundred Years Is Enough: Time to Make the Federal Reserve a Public Utility

By Ellen Brown
Global Research, December 22, 2013
Web of Debt



December 23rd, 2013, marks the 100th anniversary of the Federal Reserve, warranting a review of its performance.  Has it achieved the purposes for which it was designed?

The answer depends on whose purposes we are talking about.  For the banks, the Fed has served quite well.  For the laboring masses whose populist movement prompted it, not much has changed in a century.


Thwarting Populist Demands

The Federal Reserve Act was passed in 1913 in response to a wave of bank crises, which had hit on average every six years over a period of 80 years. The resulting economic depressions triggered a populist movement for monetary reform in the 1890s.  Mary Ellen Lease, an early populist leader, said in a fiery speech that could have been written today:

    Wall Street owns the country. It is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street, and for Wall Street. The great common people of this country are slaves, and monopoly is the master. . . . Money rules . . . .Our laws are the output of a system which clothes rascals in robes and honesty in rags. The parties lie to us and the political speakers mislead us. . . .

    We want money, land and transportation. We want the abolition of the National Banks, and we want the power to make loans direct from the government. We want the foreclosure system wiped out.

That was what they wanted, but the Federal Reserve Act that they got was not what the populists had fought for, or what their leader William Jennings Bryan thought he was approving when he voted for it in 1913. In the stirring speech that won him the Democratic presidential nomination in 1896, Bryan insisted:

    {We} believe that the right to coin money and issue money is a function of government. . . . Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank and that the government ought to go out of the banking business. I stand with Jefferson . . . and tell them, as he did, that the issue of money is a function of the government and that the banks should go out of the governing business.

He concluded with this famous outcry against the restrictive gold standard:

    You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold.

What Bryan and the populists sought was a national currency issued debt-free and interest-free by the government, on the model of Lincoln’s Greenbacks. What the American people got was a money supply created by private banks as credit (or debt) lent to the government and the people at interest. Although the national money supply would be printed by the U.S. Bureau of Engraving and Printing, it would be issued by the “bankers’ bank,” the Federal Reserve. The Fed is composed of twelve branches, all of which are 100 percent owned by the banks in their districts. Until 1935, these branches could each independently issue paper dollars for the cost of printing them, and could lend them at interest.

1929: The Fed Triggers the Worst Bank Run in History

The new system was supposed to prevent bank runs, but it clearly failed in that endeavor. In 1929, the United States experienced the worst bank run in its history.

The New York Fed had been pouring newly-created money into New York banks, which then lent it to stock speculators. When the New York Fed heard that the Federal Reserve Board of Governors had held an all-night meeting discussing this risky situation, the flood of speculative funding was retracted, precipitating the 1929 stock market crash.

At that time, paper dollars were freely redeemable in gold; but banks were required to keep sufficient gold to cover only 40 percent of their deposits. When panicked bank customers rushed to cash in their dollars, gold reserves shrank. Loans then had to be recalled to maintain the 40 percent requirement, collapsing the money supply.

The result was widespread unemployment and loss of homes and savings, similar to that seen today. In a scathing indictment before Congress in 1934, Representative Louis McFadden blamed the Federal Reserve. He said:

    Mr. Chairman, we have in this Country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks . . . .

    The depredations and iniquities of the Fed has cost enough money to pay the National debt several times over. . . .

    Some people think that the Federal Reserve Banks are United  States  Government  institutions.  They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders.

    These twelve private credit monopolies were deceitfully and disloyally foisted upon this Country by the bankers who came here from Europe and repaid us our hospitality by undermining our American institutions.

Freed from the Bankers’ “Cross of Gold”

To stop the collapse of the money supply, in 1933 Roosevelt took the dollar off the gold standard within the United States. The gold standard had prevailed since the founding of the country, and the move was highly controversial. Critics viewed it as a crime. But proponents saw it as finally allowing the country to be economically sovereign.

This more benign view was taken by Beardsley Ruml, Chairman of the Federal Reserve Bank of New York, in a presentation before the American Bar Association in 1945. He said the government was now at liberty to spend as needed to meet its budget, drawing on credit issued by its own central bank. It could do this until price inflation indicated a weakened purchasing power of the currency. Then, and only then, would the government need to levy taxes—not to fund the budget but to counteract inflation by contracting the money supply. The principal purpose of taxes, said Ruml, was “the maintenance of a dollar which has stable purchasing power over the years. Sometimes this purpose is stated as ‘the avoidance of inflation.’”

It was a remarkable realization. The government could be funded without taxes, by drawing on credit from its own central bank. Since there was no longer a need for gold to cover the loan, the central bank would not have to borrow. It could just create the money on its books. Only when prices rose across the board, signaling an excess of money in the money supply, would the government need to tax—not to fund the government but simply to keep supply (goods and services) in balance with demand (money).

Ruml’s vision is echoed today in the school of economic thought called Modern Monetary Theory (MMT). But after Roosevelt’s demise, it was not pursued. The U.S. government continued to fund itself with taxes; and when it failed to recover enough to pay its bills, it continued to borrow, putting itself in debt.

The Fed Agrees to Return the Interest

For its first half century, the Federal Reserve continued to pocket the interest on the money it issued and lent to the government. But in the 1960s, Wright Patman, Chairman of the House Banking and Currency Committee, pushed to have the Fed nationalized. To avoid that result, the Fed quietly agreed to rebate its profits to the U.S. Treasury.

In The Strange Case of Richard Milhous Nixon, published in 1973, Congressman Jerry Voorhis wrote of this concession:

    It was done, quite obviously, as acknowledgment that the Federal Reserve Banks were acting on the one hand as a national bank of issue, creating the nation’s money, but on the other hand charging the nation interest on its own credit—which no true national bank of issue could conceivably, or with any show of justice, dare to do.

Rebating the interest to the Treasury was clearly a step in the right direction. But the central bank funded very little of the federal debt. Commercial banks held a large chunk of it; and as Voorhis observed, “[w]here the commercial banks are concerned, there is no such repayment of the people’s money.” Commercial banks did not rebate the interest they collected to the government, said Voorhis, although they also “‘buy’ the bonds with newly created demand deposit entries on their books—nothing more.”

Today the proportion of the federal debt held by the Federal Reserve has shot up, due to repeated rounds of “quantitative easing.” But the majority of the debt is still funded privately at interest, and most of the dollars funding it originated as “bank credit” created on the books of private banks.

Time for a New Populist Movement?

The Treasury’s website reports the amount of interest paid on the national debt each year, going back 26 years. At the end of 2013, the total for the previous 26 years came to about $9 trillion on a federal debt of $17.25 trillion. If the government had been borrowing from its own central bank interest-free during that period, the debt would have been reduced by more than half. And that was just the interest for 26 years. The federal debt has been accumulating ever since 1835, when Andrew Jackson paid it off and vetoed the Second U.S. Bank’s renewal; and all that time it has been accruing interest. If the government had been borrowing from its central bank all along, it might have had no federal debt at all today.

In 1977, Congress gave the Fed a dual mandate, not only to maintain the stability of the currency but to promote full employment.  The Fed got the mandate but not the tools, as discussed in my earlier article here.

It may be time for a new populist movement, one that demands that the power to issue money be returned to the government and the people it represents; and that the Federal Reserve be made a public utility, owned by the people and serving them. The firehose of cheap credit lavished on Wall Street needs to be re-directed to Main Street.
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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The Federal Reserve: 100 Years of “Financial Terrorism”
« Reply #153 on: December 23, 2013, 08:48:02 am »
http://www.globalresearch.ca/the-federal-reserve-100-years-of-financial-terrorism/5362520

The Federal Reserve: 100 Years of “Financial Terrorism”

By Stephen Lendman
Global Research
December 23, 2013



December 23, 1913 will live in infamy. Three days before Christmas, House members passed the Federal Reserve Act (FSA).

On December 23, Senate members did so. President Woodrow Wilson was a tool of big money. He was JP Morgan’s man in Washington. He signed FSA into law straightaway.

So did Congress. It passed FSA in the middle of the night. Most congressional members hadn’t read it.


They wouldn’t have understood it anyway. It was cleverly worded to deceive them. Only its creators knew its purpose. Ellen Brown explained what happened as follows:

    “In plain English, the Federal Reserve Act authorized a private central bank to create money out of nothing, lend it to the government at interest, and control the nation’s money supply, expanding or contracting it at will.”

Weeks before FSA was enacted, the 1913 Revenue Act became law. It imposed a federal income tax. It did so to pay bankers interest on America’s money. It let taxpayers do it.

The University of Virginia’s Miller Center of Public Affairs calls itself a “nonpartisan research institute.” It claims to seek “to expand understanding of the presidency, policy, and political history.”

It calls the Federal Reserve Act “one of the crowning achievements of President Wilson’s New Freedom program.”

It lied claiming it helped “safeguard America’s financial institutions, the American economy, and the supply of US currency.”

It turned truth on its head saying it let “a level of governmental control…monetary supply that was unprecedented in American history.”

It went further claiming it continues to provide “the framework for regulating the nation’s banks, credit, and money supply.”

Truth is polar opposite what the Miller Center’s narrative suggests. Privately controlled Fed policy has been hugely destructive for 100 years. It’s a financial weapon of mass destruction. More on this below.

In 1910, seven powerful figures met secretly. They did so on Jekll Island. Nelson Aldrich and Frank Valderclip represented Rockefeller financial interests.

Charles Norton and Benjamin Strong represented JP Morgan. Paul Warberg represented Rothschild family interests. No one represented popular ones.

Rockefeller/Morgan/Rothschild representatives planned the Federal Reserve System. Three years later, it became the law of the land. Congress acted unconstitutionally. So did Wilson signing FSA into law.

Doing so violated the Constitution’s Article I, Section 8. It affords Congress sole power to coin (create) money and regulate the value thereof.

In 1935, the Supreme Court ruled Congress can’t constitutionally delegate its authority to another body or group.

Congress and Wilson defrauded the public. They did so by granting Wall Street money creation power. They gave powerful bankers absolute monetary control.

US and world economies changed. They did so for the worst. Former law professor Woodrow Wilson understood full well what he did. He acted lawlessly anyway.

When it was too late to matter, he lied saying:

    ”I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its credit system. Our system of credit is concentrated.”

    “The growth of the nation, therefore, 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 civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.”

Wilson irresponsibly signed into law the 1917 Espionage Act and 1918 Sedition Act. Both measures targeted free expression.

The Sedition Act specifically prohibited anti-government “disloyal, profane, scurrilous, or abusive language.” It applied when America went to war. It was repealed in December 1920.

Both measures never should have become law in the first place. Nor FSA. Congress and Wilson bore full responsibility. Subsequent lawmakers and administrations did nothing to change things.

James Madison knew the dangers of letting bankers create money.

“History,” he said, “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.”

Thomas Jefferson stressed:

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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Re: Monetary Reform!
« Reply #154 on: January 19, 2014, 03:37:55 pm »
As many of you know, this economic depression was engineered by the banking elite (just as previous ones were, going back to the 19th century).

They're also the masterminds of the NWO.

    "...the powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalistic fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences."

-- Carroll Quigley, Tragedy and Hope, p. 324


Now, with that in mind, the question arises: if, as is so often implied, it is "Tea Party" Republicans to whom we must look to lead us out of this mess, then what have they been doing for the three years -- three years -- they've been in Congress?

Blabbing periodically about how they support "auditing" the Fed?

What will that accomplish?

Prove that the Fed is corrupt?

We already know that!

Well over two years ago, Dennis Kucinich sponsored and introduced the NEED Act:

     http://thomas.loc.gov/cgi-bin/query/z?c112:H.R.2990.IH:
     http://www.monetary.org/wp-content/uploads/2013/01/HR-2990.pdf
     http://www.huffingtonpost.com/stephen-zarlenga/sequesters-shutdowns-and-_b_4086071.html

If that bill had been passed, there would be no need to audit the Fed, because there would no longer be a Fed (at least as we currently know it) to "audit."

The power of creating our entire money supply as an interesting-bearing debt to themselves is what enables the private banking interests that created the Fed in the first place to exert virtual dictatorial control over our entire economy, and hence our government -- and hence our very lives.

That power is to them what teeth are to a goliath tigerfish:

    

Remove the teeth and what do you have? A harmless goldfish:

    

It should come as no surprise that only one Democrat co-sponsored the NEED Act.

Yet how many Tea Party Republicans -- the ones who are supposedly our only hope of escaping the tyrannical wrath of the international banking elite -- co-sponsored it? You guessed it: ZERO.

During the two-plus years since that bill was introduced, how much of the time that Tea Party Republicans could have devoted to sponsoring and promoting the NEED Act was devoted instead to making tortured rationalizations for imposing austerity measures on the poor and unemployed (even as hundreds of billions in tax dollars continue to be wasted on imperialist wars, domestic police state measures and corporate welfare)?

And how many millions of Americans have, as a direct consequence of this act of political cowardice, been needlessly driven into poverty and unemployment by the very financial terrorists which said bill is designed to neutralize?

Or are we not supposed to ask such questions in the first place, lest we spoil the fun of blaming the poor for the crimes of the rich?
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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Still Report # 162 - Ellen Brown for Treasurer
« Reply #155 on: January 20, 2014, 12:11:11 pm »
http://www.youtube.com/watch?v=HRbKAIiDZ8c (Still Report # 162 - Ellen Brown for Treasurer)


^^  Why is this not getting more attention?

Is it because Ellen Brown transcends the ridiculously false Austrian-vs.-Keynesian paradigm??
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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Re: "SOUND MONEY" = CRUCIFYING MANKIND UPON A "CROSS OF GOLD!"
« Reply #156 on: January 26, 2014, 04:16:54 pm »
"Having behind us the producing masses of this nation and the world, supported by the commercial interests, the laboring interests and the toilers everywhere, we will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold." -- http://www.youtube.com/watch?v=DFKSBF6d9O4

"Author Ron Paul has been the leading champion of sound money in the Congress. He explains why sound money has meant the gold standard." -- http://mises.org/resources/3150

In 1929 the M2 money supply was approximately $46.6 billion; four years later it was roughly $32.2 billion. This 31% decrease was all it took to bring on a depression so severe and so devastating that it was called the "Great Depression."

Thus, when Austrian Schoolers insist on instituting a new gold standard under the euphemistic guise of "sound money," we would be well advised to consider what effect this would have on the M2 money supply, and hence on the economy -- and hence on our very lives.

Let's assume that a 100% reserve gold-based money system is instituted (since that's what Austrian School icon Murray Rothbard advocated); and -- since gold standard apologists are fond of waxing nostalgic about pre-1913 America (particularly the Gilded Age) -- let's also assume that, in accordance with the Gold Standard Act of 1900, each paper dollar is made "redeemable" in 23.22 grains of gold.

To determine what effect this will have on the M2 money supply -- which is $8.9137 trillion at present -- let's further assume that the U.S. has all the gold that's ever been mined (even though it doesn't) -- 165,000 metric tonnes, or 2.546336 trillion grains, according to the World Gold Council. If we divide that figure by 23.22 grains, we have a maximum M2 money supply of $109.66 billion.

That's a minimum 98.8% decrease!

This would make the 1/3 money supply contraction that occurred between 1929-1933 -- and the magnitude of the resultant depression -- both look miniscule by comparison. The effect of such a severe contraction would be beyond devastating -- it would be GENOCIDAL!

Realizing this, what if we instead made each paper dollar redeemable in merely two grains of gold? The result would be a maximum money supply of $1.273168 trillion, and hence a M2 money supply contraction of at least 85.7%, which, although not quite as bad as the previous figure (98.8%), is still far worse than the contraction that caused the Great Depression.

And if all this wasn't bad enough, there's also the issue of how the current trade deficit would (under the system in question) cause whatever gold we had to be quickly drained from our economy, thereby contracting the money supply even further.

As Byron Dale explains it here:

----------------------------

“Ok, so now we get that, which makes the total money supply for the United States roughly $1.6 trillion. Ok, if the United States has a trade deficit, like we do right now, of $40.4 billion per month (and it goes up and down a little), it would only take 3.29 years for the total money supply -- or all the gold -- to leave the country just to pay for the trade deficit. And they’re not bringing that money back -- or they’re not buying things from us -- or we wouldn’t have that trade deficit. They’re bringing this stuff over in big ships, and then the ships are going back empty. So the money flows over and doesn’t comes back, that’s why you have a trade deficit. Ok, so now, if we just went to that, with all the gold in the world, in a little over 3 1/4 years we wouldn’t have any gold in the country left -- and no money.

“Now what are we going to do?

“Now, if you borrow the gold back at interest, so you can have it back in your country, you’ve turned the whole thing into a debt money system again."

[Continued...]

----------------------------

This is why deflation-worshiping Austrians never want to talk about specifics. They figure that, if they simply parrot the euphemism "sound money" over and over again, everyone will just blindly assume that it's a good idea, and consequently refrain from determining for themselves what the actual effect of such a system would be.

Conclusion? Although Ron Paul is by far the most honorable politician in Washington, and although he's right on many issues, he is (with all due respect) sadly wrong on the question of what we should replace our current debt-based money system with.

This is why the "end the Fed" mantra is so misleading. It causes people to falsely assume that, if we simply "end" the Federal Reserve System, a much better system will magically and automatically take its place. Yet as we now see, that's not necessarily the case. Not by a long shot.

The solution? Instead of merely "ending" the Fed, we must replace it with the debt-free money system called for on page one of this thread -- a system that avoids both currency-destroying, compound interest-driven hyperinflation AND economy-destroying deflation.

Anything short of this will prove to be, at best, the equivalent of rearranging deck chairs on the Titanic, and, at worst, the equivalent of burning down the house to roast the pig.

Must we find that out the hard way?

http://www.globalresearch.ca/federal-reserve-they-do-not-have-any-more-gold-paul-craig-roberts/5365933

Federal Reserve: “They Do Not Have Any More Gold”. Paul Craig Roberts

By Dr. Paul Craig Roberts
Global Research, January 23, 2014
usawatchdog.com



By Greg Hunter

Former Assistant Treasury Secretary Paul Craig Roberts is making some bold new claims about the Federal Reserve and its official government gold holdings.  Dr. Roberts contends,

    “They don’t have any more gold.  That’s why they can only give Germany 5 tons of the 1,500 tons it’s holding.  In fact, when Germany asked for this delivery last year, the Fed said no.  But it said we will give you back 300 tons . . . . So, they said we will give you back 20% of what you trusted us to keep for you over the next seven years, but they are not even able to do that.”

Dr. Roberts goes on to say, “The stocks of gold at the Bank of England seem to be disappearing.  The stocks of many of the gold trusts, such as GLD, are being looted . . . all of this gold is disappearing into Asian markets.  The entire West is being drained of gold.”

According to Dr. Roberts, this is an inflection point for the gold market.

Dr. Roberts says,

    “The reason is: the ability to supply large amounts of gold to the bullion dealers to sell has diminished with the supply of gold and silver.  What the Fed did was turn to massive ‘naked shorts’ of gold futures contracts.  They don’t have the real gold  . . . so they come in and dump contracts, say in a period of 6 minutes, that are three times the amount of gold COMEX has to make delivery. . . . So, it drives down the price of gold.  That’s how they got the price down from $1,900 to $1,250.”

Roberts contends that America’s gold is “mainly gone.” That’s right, a former Assistant Treasury Secretary who is the father of Reaganomics, says, “They obviously don’t have any because, if they did, they would have given Germany’s gold back.  If they had any, they would let people audit the vaults.”  Dr. Roberts warns,

    “The point is the ability to continue selling these ‘naked shorts’ is now disappearing because there is no gold left to back them up. . . . None of these EFT’s has the gold to back the shares.  The ability to continue looting them in order to make good on gold deliveries is running out.  So, this will prevent the Fed from selling ‘naked shorts’ to protect the dollar from its policy of quantitative easing.  That’s what’s it’s all about.  You can’t print $1,000 billion new dollars every year without causing other holders of dollars to wonder about the value of the money and to seek a way of getting out of it.  China has been doing that by going into gold.”

On gold holdings, Dr. Roberts argues there are two big reasons why he says, “I don’t think they have any.”  Roberts says,

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

Offline Geolibertarian

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The Federal Reserve Is Not “Independent” Or “Apolitical”
« Reply #157 on: February 24, 2014, 12:18:27 pm »
http://www.prisonplanet.com/the-federal-reserve-is-not-independent-or-apolitical.html

The Federal Reserve Is Not “Independent” Or “Apolitical”

Washington’s Blog
February 24, 2014

The Federal Reserve likes to pretend that it is “independent” and “apolitical”.

The facts are different:

*  The Fed offered to bail out Mexico, if it would agree to join the North American Free Trade Agreement (NAFTA). Free trade deals have nothing to do with the Fed’s mandate

*  A study published in the Southern Economic Journal shows that Fed policy tends to create a better economy in the 3 years before presidential elections than right afterwards … to help the incumbent get re-elected

*  According to Robert D. Auerbach – an economist with the U.S. House of Representatives Financial Services Committee for eleven years, assisting with oversight of the Federal Reserve, and subsequently Professor of Public Affairs at the University of Texas at Austin – the Fed had a hand in Watergate and arming Saddam Hussein.  See this and this

*  The Fed is not independent … it is owned by the big banks

The Fed is corrupt

*  The Fed threw money at “several billionaires and tens of multi-millionaires”, including billionaire businessman H. Wayne Huizenga, billionaire Michael Dell of Dell computer, billionaire hedge fund manager John Paulson, billionaire private equity honcho J. Christopher Flowers, and the wife of Morgan Stanley CEO John Mack

*  The Fed also bailed out wealthy corporations, including hedge funds, McDonald’s and Harley-Davidson

*  The Fed has been bailing out foreign banks … more than Main Street or the American people.  The foreign banks bailed out by the Fed include Gaddafi’s Libyan bank, the Arab Banking Corp. of Bahrain, and the Banks of Bavaria, Korea and Mexico

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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http://www.globalresearch.ca/the-federal-reserves-transcripts-the-greatest-propaganda-coup-of-our-time/5371288

The Federal Reserve’s Transcripts: The Greatest Propaganda Coup of Our Time?

The New York Times and the Fed's Transcripts

By Mike Whitney
Global Research, February 28, 2014
Counterpunch



There’s good propaganda and bad propaganda. Bad propaganda is generally crude, amateurish Judy Miller “mobile weapons lab-type” nonsense that figures that people are so stupid they’ll believe anything that appears in “the paper of record.” Good propaganda, on the other hand, uses factual, sometimes documented material in a coordinated campaign with the other major media to cobble-together a narrative that is credible, but false.

The so called Fed’s transcripts, which were released last week, fall into the latter category. The transcripts (1,865 pages) reveal the details of 14 emergency meetings of the Federal Open Market Committee (FOMC) in 2008, when the financial crisis was at its peak and the Fed braintrust was deliberating on how best to prevent a full-blown meltdown. But while the conversations between the members are accurately recorded, they don’t tell the gist of the story or provide the context that’s needed to grasp the bigger picture. Instead, they’re used to portray the members of the Fed as affable, well-meaning bunglers who did the best they could in ‘very trying circumstances’. While this is effective propaganda, it’s basically a lie, mainly because it diverts attention from the Fed’s role in crashing the financial system, preventing the remedies that were needed from being implemented (nationalizing the giant Wall Street banks), and coercing Congress into approving gigantic, economy-killing bailouts which shifted trillions of dollars to insolvent financial institutions that should have been euthanized.

What I’m saying is that the Fed’s transcripts are, perhaps, the greatest propaganda coup of our time. They take advantage of the fact that people simply forget a lot of what happened during the crisis and, as a result, absolve the Fed of any accountability for what is likely the crime of the century. It’s an accomplishment that PR-pioneer Edward Bernays would have applauded. After all, it was Bernays who argued that the sheeple need to be constantly bamboozled to keep them in line. Here’s a clip from his magnum opus “Propaganda”:

    “The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.”

Sound familiar? My guess is that Bernays’ maxim probably features prominently in editors offices across the country where “manufacturing consent” is Job 1 and where no story so trivial that it can’t be spun in a way that serves the financial interests of the MSM’s constituents. (Should I say “clients”?) The Fed’s transcripts are just a particularly egregious example. Just look at the coverage in the New York Times and judge for yourself. Here’s an excerpt from an article titled “Fed Misread Crisis in 2008, Records Show”:

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

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The Stone that Brings Down Goliath? Richmond and Eminent Domain
« Reply #159 on: March 06, 2014, 10:21:51 am »
http://ellenbrown.com/2014/03/03/the-stone-that-brings-down-goliath-richmond-and-eminent-domain/

The Stone that Brings Down Goliath? Richmond and Eminent Domain

by Ellen Brown
The Web of Debt Blog
March 3, 2014

In a nearly $13 billion settlement with the US Justice Department in November 2013, JPMorganChase admitted that it, along with every other large US bank, had engaged in mortgage fraud as a routine business practice, sowing the seeds of the mortgage meltdown. JPMorgan and other megabanks have now been caught in over a dozen major frauds, including LIBOR-rigging and bid-rigging; yet no prominent banker has gone to jail. Meanwhile, nearly a quarter of all mortgages nationally remain underwater (meaning the balance owed exceeds the current value of the home), sapping homeowners’ budgets, the housing market and the economy. Since the banks, the courts and the federal government have failed to give adequate relief to homeowners, some cities are taking matters into their own hands.

Gayle McLaughlin, the bold mayor of Richmond, California, has gone where no woman dared go before, threatening to take underwater mortgages by eminent domain from Wall Street banks and renegotiate them on behalf of beleaguered homeowners. A member of the Green Party, which takes no corporate campaign money, she proved her mettle standing up to Chevron, which dominates the Richmond landscape. But the banks have signaled that if Richmond or another city tries the eminent domain gambit, they will rush to court seeking an injunction. Their grounds: an unconstitutional taking of private property and breach of contract.

How to refute those charges? There is a way; but to understand it, you first need to grasp the massive fraud perpetrated on homeowners. It is how you were duped into paying more than your house was worth; why you should not just turn in your keys or short-sell your underwater property away; why you should urge Congress not to legalize the MERS scheme; and why you should insist that your local government help you acquire title to your home at a fair price if the banks won’t. That is exactly what Richmond and other city councils are attempting to do through the tool of eminent domain.

The Securitization Fraud That Collapsed the Housing Market

One settlement after another has now been reached with investors and government agencies for the sale of “faulty mortgage bonds,” including a suit brought by Fannie and Freddie that settled in October 2013 for $5.1 billion. “Faulty” is a euphemism for “fraudulent.” It means that mortgages subject to securitization have “clouded” or “defective” titles. And that means the banks and real estate trusts claiming title as owners or nominees don’t actually have title – or have standing to enjoin the city from proceeding with eminent domain. They can’t claim an unconstitutional taking of property because they can’t prove they own the property, and they can’t claim breach of contract because they weren’t the real parties in interest to the mortgages (the parties putting up the money).

“Securitization” involves bundling mortgages into a pool, selling them to a non-bank vehicle called a “real estate trust,” and then selling “securities” (bonds) to investors (called “mortgage-backed securities” or “collateralized debt obligations”). By 2007, 75% of all mortgage originations were securitized. According to investment banker and financial analyst Christopher Whalen, the purpose of securitization was to allow banks to avoid capitalization requirements, enabling them to borrow at unregulated levels.

Since the real estate trusts were “off-balance sheet,” they did not count in the banks’ capital requirements. But under applicable accounting rules, that was true only if they were “true sales.” According to Whalen, “most of the securitizations done by banks over the past two decades were in fact secured borrowings, not true sales, and thus potential frauds on insured depositories.” He concludes, “bank abuses of non-bank vehicles to pretend to sell assets and thereby lower required capital levels was a major cause of the subprime financial crisis.”

In 1997, the FDIC gave the banks a pass on these disguised borrowings by granting them “safe harbor” status. This proved to be a colossal mistake, which led to the implosion of the housing market and the economy at large. Safe harbor status was finally withdrawn in 2011; but in the meantime, “financings” were disguised as “true sales,” permitting banks to grossly over-borrow and over-leverage. Over-leveraging allowed credit to be pumped up to bubble levels, driving up home prices. When the bubble collapsed, homeowners had to pick up the tab by paying on mortgages that far exceeded the market value of their homes. According to Whalen:

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0