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Federal Reserve Scam

Discussion in 'Financial Cents' started by overbore, Nov 20, 2008.

  1. overbore

    overbore Monkey++

    By far one of the biggest shams ever foisted on the American public, the Fed is nothing more than the creation of "member" banks. Purportedly to achieve the goals outlined in their charter; their only real purpose is to grow their member banks balance sheets. Of course they'll never tell you that...instead you get Federal Reserve double-speak and the ex-CEO of Goldman Sachs in charge of our economic well-being (which he assumes to entail making charitable donations to his alma mater.)
    The Fed's structure and operations are notoriously clandestine and obscure. They operate under a shroud of secrecy, they don't release minutes from their meetings until five years later, and - as New York Times reporter Edmund Andrews puts it - even expert policy analysts are usually dumbfounded by the Fed's decisions.
    So in the next few pages we're going to clear up many of the myths and misconceptions regarding the Federal Reserve System. You'll finally get to see what their true objectives are supposed to be - according to their government charters and bylaws - and you'll be shocked by just how poorly this quasi-governmental agency has actually done its job.

    Fed paves the way for a very hard landing

    In the last few months we've been struck by the perfect storm. Cheap credit, financial engineering, rampant consumerism and a sub-zero savings rate teamed up to make September/October of 2008 one for the record books. The S&P has so far shed over 30%, and most of the broad market indices are testing multi-year lows in one of the most volatile periods in stock market history. It seems that everyone is flying blind.
    And in the middle of all this, Ben Bernanke and Hank Paulson have been terribly busy men. They've executed backdoor changes to tax policy in the middle of the night, told half-truths on the floor of Congress, and they've thrown out some US$4.2 trillion in taxpayer money (so far)...mostly at Hank's old co-workers.
    It's worth noting that US$2 trillion of our money has gone out the door for "hush-hush" loans to undisclosed recipients. And for that secrecy they're currently being sued by Bloomberg.
    They've used those taxpayer funds to buy stakes in questionable banks and the failing insurance giant AIG, and to top it all off, Hank and his sidekick Kashkari have given conflicting reports on the TARP plan that essentially exposes one of the two as a liar. As I said; they've been very busy.
    But with all of America clutching our pocketbooks in panic, it seems that we've forgotten to ask the important questions. Like ‘Do they have any right to be doing this?' ‘Is this what they're supposed to be doing?' and my personal favorite, ‘Is the Fed simply cleaning up a mess that they were responsible for in the first place?'
    We'll be answering those questions in detail over the next few pages. But I suppose if you're not one for suspense we can go ahead and do it now; no, no and yes.

    The Fed's scorecard

    Their charter reads like a mix between stereo instructions and the tax code, but at its core is the idea that the Fed's impact on the economy should be positive, not negative. According to their website, their four duties to the American people - and the goals of their monetary policy - are to 1) maximize employment, 2) stabilize prices, 3) Moderate long-term interest rates and 4) Promote sustainable economic growth. Let's go through these one at a time;
    1) Maximize employment. Well, that one definitely falls out in the next year or two. Jobless claims beating 500,000 at a weekly rate, an impending disaster in the automotive industry and an un-fudged unemployment rate of 11.8%. Some pessimists suggest that number could scrape the 20s by next year. Add in the 25% unemployment rates and you get a big, long-term fail there. What was unemployment in 1912, the year before we got the Fed? 4.4%. Thanks again Fed. Big help.
    2) Stable prices. I got six words for that one. One hundred-fifty dollars a barrel. Thanks for the help there, Fed.
    3) Moderate long-term interest rates. We'll talk about that one shortly. But apparently moderating long-term interest rates doesn't mean keeping those rates sub-zero to skirt a short recession and set up the greatest asset bubble in the history of mankind. Who would've guessed that?
    4) Promotion of sustainable economic growth. Well, if you take the word sustainable out of that one then they've done a great job! Otherwise it's right back to the drawing board.
    Wow. When you look at it like that, it's hard to make a good case for the Federal Reserve. Well, if they've failed at these four core goals, then they must have been up to something. What other great things has the Fed been doing for the American people, you ask?
    How about setting the stage for this massive economic collapse? That's right, Alan Greenspan's ‘liquidity experiment' and the years of effectively sub-zero interest rates gave businesses the incentive to absorb credit like a sponge and take on debt by the boatload. After all, if the government is paying you to take the money, why not?
    What followed were more years of painfully irresponsible lending and borrowing, of which sub-prime and Adjustable Rate Mortgages have now become the poster-child. And the sheer volume of bad loans made during that period are currently endangering the whole of the world's credit, not to mention its sovereignty and well-being.
    And once again...History proves that Andrew Jackson was Right

    Andrew Jackson was certainly a crazy old man, and by today's standards he'd fall somewhere between ‘geezer' and ‘curmudgeon,' but it turns out that many of his world views were right on target.​
    In addition to defusing America's first attempted presidential assassination by bludgeoning the would-be assassin halfway to death with his walking stick, Jackson abolished the country's second central bank. Yes...you read that right. This Federal Reserve is America's third go at a centralized banking system. And yes, the first two were indeed miserable failures. ​
    In reference to the second central bank, Jackson once said:​
    "The bold effort the present bank had made to control the Government, the distress it had wantonly produced ... are but premonitions of the fate that awaits the American people should they be deluded into a perpetuation of this institution, or the establishment of another like it."​
    They just don't make politicians like they used to. Jackson was also the only president in American history to get America out of debt and into the black...a place we're all wishing we could be right now.​
    Instead what do we have? We have a quasi-governmental institution printing dollars to back terrible business decisions. We have a central bank that's currently leveraged around 60:1 and throwing paper at a monster of its own design. We have a congressionally approved bail-out of US$700 Billion attached to a payout of roughly US$4.2 trillion. And one of the men facilitating all of this is retiring on money he earned from a bank receiving some of the most special care in the proceedings.​
    But more importantly, we have a complex system that's ultimately shifting the balance of risky investments from private institutions over to the government, and gradually turning Treasury notes into sub-prime paper. We have an institution that's fighting fire with fire, instead of water. They're playing ‘Depression dominoes' and hoping that a problem caused by irresponsible and overzealous lending can be cured by irresponsible and overzealous lending. ​
    And they seem to be steadfast in their determination to crash our ship into that iceberg. The best reference in history for this event is the Crash of 1345, where kings and governments traded their sovereignty to the bankers for prosperity and quick cash. What followed is something we now call ‘The Dark Ages.'

    It appears to this curmudgeon that the Fed is setting the ground for a deliberate default on our Treasury securities in 09 with all the possible turmoil associated thereto in including a possible new currency. The wild card appears to me to be the Bank for International Settlements, where the majority of international gold is stored in New York. That may be our
    "hammer" but conspiracy theories aside, taking perfectly good paper and ink, printing "money" on it and saying that is is store of value can only end with inflation like Zimbabwe, 13,000+ % per month, for the end for false money is at hand.

    Whatever develops, it is time to have, in my opinion, food, a significant means to keep it, hard currency and strong attachments to our Creator so that we are able to meet whatever challenges come our way including ever larger governmental lies and regulations to cover their ineptness. The very Spendocrats that caused the problem are telling us through the lying mass media, that they will cure it. Show me where socialism has worked or is working, please, then ask us to believe but until then, Laudis Deo.


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