Monetary Policy: What are our choices?

Tags

Bond, Central Bank, Counterfeiting, Duration Mismatch, Federal Reserve, Federal Reserve System, Fractional reserve banking, Government debt, Government Spending, Monetary Policy, Money Supply, Murray Rothbard, New York Federal Reserve Bank, Reality, U.S. Government, United States, United States Treasury security

Here is where we stand.

It is mathematically impossible for the U.S. government to pay off the U.S. national debt. EVER. You see, the U.S. government now owes more dollars than actually exist. If the U.S. government went out today and took every single penny from every single American bank, business and taxpayer, they still would not be able to pay off the U.S. national debt.

If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt–and then, ONLY IF, we didn’t increase the debt by a SINGLE penny.

Now why doesn’t the U.S. government just fire up the printing presses and print a bunch of money to pay off what we owe?

Well, for one very simple reason. The U.S. government does not issue U.S. currency – the Federal Reserve does. Pull a dollar bill out and look at it. It says “Federal Reserve Note” at the top. The Federal Reserve is a private bank. It is owned and operated, for profit, by international bankers.

When the U.S. government needs more money, it cannot simply create the needed money.

Instead, when the U.S. government runs out of money (which happens a lot these days) it has to BORROW IT by going over to the Federal Reserve and asking them for green pieces of paper called Federal Reserve Notes.

The Federal Reserve swaps these green pieces of paper for pink pieces of paper called U.S. Treasury bonds. The Federal Reserve either sells these U.S. Treasury bonds or they keep the bonds for themselves.

So that is how the U.S. government gets more green pieces of paper called “U.S. dollars” to put into circulation. But by doing so, they get themselves into even more debt which they will owe even more interest on.

Every time the U.S. government borrows from the federal reserve, the national debt gets bigger and the INTEREST on that debt gets EVEN bigger.

Are you starting to get the picture?

To make the situation worse, NOBODY, not even the federal reserve, has a clue how much money even EXISTS in the United States today because our financial system is based on fractional reserve banking.

When you go over to your local bank and deposit $100, your bank doesn’t keep your $100 in the bank. Instead, only a small fraction of your money stays at the bank. The bank lends out the rest to someone else. If the “someone else” then deposits the money that was just borrowed at the same bank, that “same bank” can loan out most of that money once again. In this way, the amount of “money” quickly gets multiplied. But in reality, only $100 actually exists. The system works because we do not all run down to the bank and demand all of our money at the same time. (Not that it could never happen.)

The crowd shown above is gathered in front of the Guardian Trust Company and National City Bank on February 28, 1933..

The New York Federal Reserve Bank, explains fractional reserve banking like this….

“If the reserve requirement is 10%, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+…=$1,000).”

So much of the “money”counted on bank books as assets is basically made up out of thin air.

And, in fact, most banks have no reserve requirements at all on savings deposits, CDs and certain kinds of money market accounts. Primarily, reserve requirements apply only to “transactions deposits” – essentially checking accounts.

Banks are freer today to dramatically “multiply” the amounts deposited with them than ever before. NONE of WHAT CREATED THE BANKING CRISIS OF 2008 has been fixed.

The U.S. government CAN GO OUT AND and DEMAND every SINGLE dollar from EVERY banks, businesses and individual in the United States and it would not be able to collect 14 trillion dollars. IT COULDN’T COLLECT 8.5 trillion dollars.

The Federal Reserve Banking System is a game designed which the United States Government CAN’T WIN.

We could solve this problem by shutting down the Federal Reserve and restoring the power to issue U.S. currency to the U.S. Congress (which is what the U.S. Constitution calls for). But the politicians in Washington D.C. are not about to do that.

The politicians have become more concerned with their own perpetuation than with service to society. As they blunder from crisis to crisis, they blame markets and freedom for the problems created by poor central planning and structure within the financial system.

Giving banks a monopoly over the initial allocation of credit and money enriches the banks at the expense of society. Banks and bankers — who produce nothing — allocate resources to their interests. The rest of society — including all the productive sectors — get crumbs from the table. The market mechanism is perverted, and bent in favour of the financial system.

Such a system is unsustainable. The subsidization of incompetence breeds more incompetence, and weakens the system, whether it is government handing off corporate welfare to inept corporations, or whether it is the central bank bailing out inept financial institutions. The financial system never learned the lessons of 2008; MF Global and the London Whale illustrate that. Printing money to save broken systems just makes these systems more fragile and prone to collapse. Ignoring the market mechanism, and the interests of the wider society to subsidise the financial sector and well-connected corporations just makes society angry and disaffected.

Between fractional reserve banking, extreme leverage, mismarking of books, questionable derivatives and rehypothecation is there ANY possibility of a free market?

What if these mechanisms are contrivances PURPOSEFULLY designed to skim off everything left to skim while driving the financial system the point of collapse?

Even if a financial collapse wasn’t planned, now that the endgame is clearly in sight…

“You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.” ~Rahm Emanuel

Related articles

• Where Does Money Come From? The Giant Federal Reserve Scam That Most Americans Do Not Understand (blacklistednews.com)
• Where does money come from? The giant Federal Reserve scam that most Americans do not understand (antioligarch.wordpress.com)
• Why A Debt Based Financial System Will Always Fail In The Long Run (GLD, SLV, UUP, UDN, XLF) (etfdailynews.com)
• Are we AT the end of the road? (elkhartcountygrassrootshub.wordpress.com)
• The Giant Federal Reserve Scam That Most Americans Do Not Understand (wealthwire.com)

Are we AT the end of the road?

Tags

Asia, Bank, Bank run, BROKE, Business, BUSTED, CDS, China, Debt, Derivatives, Eurozone Crisis, Fiat Money, Financial Crisis, Financial Services, Fiscal Cliff, Fractional reserve banking, Government debt, Japan, Leveraged

ARE WE THERE YET?

We don’t know EXACTLY what is to come, but we can joint the dots from where we are now to the collapse of the first major bank…

• With very limited room for government bailouts, we can very easily join the next dots from the first bank closure to the collapse of the whole European banking system, and then to the bankruptcy of the governments themselves.
• There are almost no brakes in the system to stop this, and almost no one realises the seriousness of the situation.
• The problem is not government debt per se. The real problem is that the $70 trillion in G10 debt is the collateral for $700 trillion in derivatives…
• Yes, that equates to 1200% of Global GDP and it rests on very, very weak foundations
• From an EU crisis, we only have to join one dot for a UK crisis of equal magnitude.
• And then do you think Japan and China would not be next?
• And then do you think the US would survive unscathed?
• That is the end of the fractional reserve banking system and of fiat money.

There is no way out, as shown HERE.

Related articles

• The Banking System at the Root of the Crisis (newleftproject.org)
• The Derivatives NIGHTMARE: A Fraud Far Beyond Fractional Reserve Banking (sgtreport.com)
• Fractional Reserve Banking, Government, and Moral Hazard (thedailybell.com)
• Duration Mismatch Will Always Fail (safehaven.com)
• Fractional Reserve Banking, Government, and Moral Hazard (safehaven.com)
• Disintegration: What It Looks Like When a Nation Collapses (sgtreport.com)

Why you should bank with a local bank or credit union and NOT the TBTF

Tags

Balloon ready to pop, Bank, Bank of America, Banking, Economy, Finance, Financial Collapse, Late-2000s financial crisis, Loan, Money laundering, Nazism, President of the United States, TBTF, Thieves, Too Big To Fail

So you think the big banks do good things for society, like loan money to Main Street, right?

Ha!

Actually…big banks no longer do very much traditional banking. Most of their business is from financial speculation. For example, less than 10% of Bank of America’s assets come from traditional banking deposits. Instead, they are mainly engaged in financial speculation and derivatives. (and see this)

Since they were bailed out by taxpayers, the big banks have slashed lending … while smaller banks have increased lending. See this, this and this.

According to Thomas Jefferson, “Banking Institutions are more dangerous to our liberties than standing armies”

To prove Jefferson’s point that there is NOTHING you can trust about big banking, the “Too Big To Fail” gang is guilty of:

• Funding the Nazis

• Laundering money for terrorists

• Financing illegal arms deals, and are funding the manufacture of cluster bombs (and see this and this)  and other arms which are banned in most of the world

• They launched a coup against the President of the United States

• Handled money for rogue military operations

• Laundered money for drug cartels. See this, this, this and this (indeed, drug dealers kept the banking system afloat during the depths of the 2008 financial crisis)

• Engaged in mafia-style big-rigging fraud against local governments. See this, this and this

• Shaved money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here and here

• Artificially suppressed gold prices

• Charged “storage fees” to store gold bullion … without even buying or storing any gold . And raided allocated gold accounts

• Committed massive and pervasive fraud both when they initiated mortgage loans and when they foreclosed on them (and see this)

• They pledged the same mortgage multiple times to different buyers. See this, this, this, this and this. This would be like selling your car, and collecting money from 10 different buyers for the same car

• Cheated homeowners by gaming laws meant to protect people from unfair foreclosure

• Committed massive fraud in an $800 trillion dollar market which effects everything from mortgages, student loans, small business loans and city financing

• Manipulated the hundred trillion dollar derivatives market

• Engaged in insider trading of the most important financial information

• Pushed investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this, this and this

• Engaging in unlawful “frontrunning” to manipulate markets. See this, this, this, this, this and this

• Engaging in unlawful “Wash Trades” to manipulate asset prices. See this, this and this

• Otherwise manipulated markets. And see this

• Participating in various Ponzi schemes. See this, this and this

• Charged veterans unlawful mortgage fees

• Helped the richest to illegally hide assets

• Cooked their books (and see this)

• Bribed and bullied ratings agencies to inflate ratings on their risky investments

The executives of the big banks invariably pretend that the hanky-panky was only committed by a couple of low-level rogue employees. But studies show that most of the fraud is committed by management.

Indeed, one of the world’s top fraud experts – professor of law and economics, and former senior S&L regulator Bill Black – says that most financial fraud is “control fraud”, where the people who own the banks are the ones who implement systemic fraud. See this, this and this.

• A huge portion of the banks’ profits comes from taxpayer bailouts. For example, 77% of JP Morgan’s net income comes from taxpayer subsidies

• The big banks are literally killing the economy … and waging war on the people of the world

• And our democracy and republican form of government as well

Related articles

• 25 Mind-Blowing Crimes Committed By Big Banks (dprogram.net)
• Stunning Crimes of the Big Banks: Worse than Your Wildest Imagination (washingtonsblog.com)
• Money Laundering Control Act Is it As Good As It Seems (acefinance.me)
• General Conspiracies – Re: Stunning Crimes of the Big Banks: Worse than…. (disclose.tv)
• Are Big Banks Criminal Enterprises? (ritholtz.com)
• BuzzFlash on Money Laundering and Treason (seniorsforademocraticsociety.wordpress.com)
• Are Big Banks Criminal Enterprises? (washingtonsblog.com)
• How London became the money-laundering capital of the world (ianfraser.org)