Category Archives: Federal Reserve

Why There Won’t be Another Bailout, Courtesy of the Federal Reserve

federal reserve bailout

The 2008 Bailout:  Why it won’t happen one more time.

You  might feel like the problem has passed, but in 2008, the US  experienced only the tremors of a great and forthcoming economic collapse. Since then, Americans have been living in an economic depression the likes of which have not been seen for over 70 years, but which is only an opening tremor in comparison to the coming devastation of a coming huge economic earthquake. Although the major media outlets in cooperation with the federal government continue to report the overall economic situation to be recovering, no such thing is either possible or is really happening at all.

We are actually NOW in the midst of a severe economic depression,  

and the crash has not yet come to a conclusion. 2008 was only the beginning.

The 2008/2009 Bailout of the Major Banks – What happened?

Beginning in 2008, Goldman-Sachs, JP Morgan, Morgan Stanley, Lehmann, Citibank, and Bank of America, among a few others, all suffered conditions of insolvency that would have put them completely out of business were it not for the bailouts that arrived at the last moment from the Federal Reserve, and from a number of other related federal banking agencies. Here’s what happened in a nutshell.

A sudden burst in the real estate bubble caused millions of mortgages to be instantaneously over- valued.  Consequently millions of American mortgages began to go into foreclosure. Foreclosures in large quantities are bad for banks because they create an instant cash shortage. A huge drop in incoming mortgage payments compounded by the problem of needing to shed massive amounts of over evaluated property at a loss, meant that the business of loaning money could not go on unless there were simply more capital on hand.

 Federal Reserve to the rescue?

The Fed stepped in and fixed numerous bank insolvency threats by supplying huge amounts of cash to major banks. The problem was, the Fed itself didn’t really have the money to solve this crisis either. Sure, they had  a few tens of billions of dollars in the reserve, but what they needed was tens of TRILLIONS of dollars! Everyone seems to believe that the Fed always does and always will have cash on hand, but the fact is that Fed had to play some serious games to “create” the money needed to keep these major banks from going under in 2008.

Where the Fed Got the Bailout Money: Borrowing and Printing, Borrowing and Printing, Borrowing and Printing

The bottom line is that the money for the bailouts was created by just playing more dancing around and switcharoo games. The first thing the Fed did was to print about 4 trillion dollars, which make up the reserves that most US banks are still using to operate on. BUT….. that wasn’t nearly enough to handle this emergency!

So, the second thing the Federal Reserve did was to call up the European Central Bank (ECB) and cry “Help!”. Here is what they did with what they had to work with, after having printed as many trillion dollars as they could risk without creating unmanageable inflation.

The European Central Bank had a significant amount of dollar liabilities, owing at that time several trillion dollars to the US money market. So, the Fed effectively asked them to cough up as much of their debt as possible, and to do it immediately!  They came up with around 13 trillion dollars. Of course they didn’t have the dollars on hand to pay out, nor did they have enough Euros lying around in their own reserve to fill the Fed’s need. But since the ECB can print Euros, they did, and then they swapped newly printed Euros for newly printed dollars from the Fed, both of them backed by nothing. That is what was then supplied to fund the Federal Reserve.

Consequently this problem also affected the European money market too. Euros also had to be printed out of thin air. Contrary to popular belief, you can’t just print massive amounts of un-backed currency without inflationary effects. We’re talking about trillions of dollars and trillions of Euros, so it’s hard to imagine that solving the Fed’s problem with fresh crisp currency didn’t also have some negative impact on the value of the Euro.  But it worked, sort of. It was a well calculated risk, and neither the US economy  nor the European economy suffered its final crash as a result.

And what to do when the next emergency arises?

So, will the ECB still be able to continue to prop up the Federal Reserve the next time it has another unsolvable insolvency problem? It’s highly unlikely. Because the Fed continues to do business as usual, and because it has now reached the point of not generating enough revenue to pay even the interest on all of its own debts, an even bigger crash is assuredly coming.

Why  the dollar WILL  crash.

This time the crash will be based upon a sudden and complete loss of world confidence in the dollar. The world is quite aware of the financial perils of the Federal Reserve. It’s credit rating is bad now. When that lack of confidence causes the market for Treasury Bills and bonds to completely die, the Fed will lose its ability to inject any more cash into our system from other systems by just borrowing it. Lacking any other real significant source of income, its only remaining alternative will be to print more and more and more pure counterfeit currency. The result will be hyper-inflation.

Next time they’ll need MORE than mere tens of trillions!

Today the Federal Reserve is falsely looked upon as the hero of 2008 because of its quick thinking that resulted in finding a convenient solution with the European bank. The truth is that the Fed itself caused the very crash they managed to bail us out of with the help of the European Bank.

In the next and probably final crash, it won’t just be tens of trillions that will be needed. The size and volume of the losses that would be caused by hyper-inflation of the dollar would be far more than the ECB could possibly swallow.To implement another solution like that of 2008 would drag the Euro right down with the dollar.

Fasten your seat belts. You may think the ride is smooth now, but the ride ahead will not be. Read more about this topic at Jim Rickards’ blog.

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Libertarianism – The Shocking Notion that Other People Are Not Your Property

Liberty Freedom Libertarianism

2 of the most interesting people in political thought. Both of whom in my experience are actually decent human beings too.

Almost everyone knows Ron Paul but more people should be familiar with Tom Woods who’s bookMeltdown is a fantastic (and very accessible) explanation of the 2008 Crash. You can read his work and listen to his show at TomWoods.com.

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The Great Depression was Deliberately Created by the Federal Reserve As Well As Every Depression Since

1913 us federal reserve one hundred years of bankrupting your nation

The Great Depression was Deliberately Created by the Federal Reserve and so was Every Depression Since

Apparently congress was aware of the scheme of the international bankers and recognized the danger that the republic was in. Congressman Lindberg said in a Congressional Record dated, December 22, 1913, vol. 51, “This new law [the Federal Reserve Act] will create inflation whenever the trusts want inflation. It may not do so immediately, but … if the trusts can get another period of inflation, they figure they can unload the stocks on the people at high prices during the excitement and them bring on a panic and buy them back at low prices… The people may not know it immediately, but the day of reckoning is only a few years removed.”

“That day of reckoning, of course, came in 1929,” said Perloff, “and the Federal Reserve has since created an endless series of booms and busts by the strategic tightening and relaxation of money and credit.” Speaking about the historical disinformation regarding the crash, Perloff said, “Establishment historians present the ’29 stock market crash as they do most events: an accident, evolved from erroneous policies, not from deliberate planning. We have all heard how foolish speculation bid stock prices high, but that the bubble finally burst, plunging brokers out of windows and America into the Depression.”

“Having built the Federal Reserve as a tool to consolidate and control wealth, the international bankers were now ready to make a major killing,” stated Allen. Between 1923 and 1929,” he described, “the Federal Reserve expanded (inflated) the money supply by sixty-two percent. Much of this new money was used to bid the stock market up to dizzying heights. At the same time that enormous amounts of credit money were being made available,” continued Allen, “the mass media began to ballyhoo tales of instant riches to be made in the stock market. According to Ferdinand Lundberg: ‘For profits to be made on these funds the public had to be induced to speculate, and it was so induced by misleading newspaper accounts, many of them bought and paid for by the brokers that operated the pools.'”

Perloff concurred, writing, “The Federal Reserve prompted the speculation by expanding the money supply a whopping sixty-two percent between 1923 and 1929. When the central bank became law in 1913, Congressman Charles Lindbergh had warned:

‘From now on, depressions will be scientifically created.’

Like two con men working a mark, the Fed made credit easy while Establishment newspapers hyped what riches could be made in the stock market.” “Curtis Dall,” he continued, “himself a syndicate manager for Lehman Brothers was on the floor of the New York Stock Exchange on the day of the Crash.” Perloff quotes Dall as declaring, “Actually, it was the calculated ‘shearing’ of the public by the World-Money powers triggered by the planned sudden shortage of call money in the New York money market.”

The “shearing,” wrote Allen, caused a “despair [which] produced a willingness to accept a major expansion of government controls over the economy. … In 1929, America was a long way from total government.” He advised, “The next depression will be used as the excuse for complete socialist-fascist controls at home and the creation of a World Superstate internationally.”

Congressman Louis McFadden, Chairman of the House Banking Committee, declared of the Depression, “It was not accidental. It was a carefully contrived occurrence.” He warned, “The international bankers sought to bring about a condition of despair here so that they might emerge as rulers of us all.” The Great Depression is another example of the Problem-Reaction-Solutionformula.

“Plummeting stock prices ruined small investors, but not the top “insiders” on Wall Street,” wrote Perloff. “Paul Warburg had issued a tip in March of 1929 that the crash was coming. Before it did, John D. Rockefeller, Bernard Baruch, Joseph P. Kennedy, and other money barons got out of the market. … Early withdrawal from the market not only preserved the fortunes of these men,” said Perloff, “it also enabled them to return later and buy up whole companies for a song.”

“History shows that the Wall Street biggies came through very well indeed,” wrote Alan B. Jones in his book, How the World Really Works. Quoting from G. Edward Griffin’s book, The Creature from Jekyll Island, he added, “Virtually all of the inner club was rescued. There is no record of any member of the interlocking directorate between the Federal Reserve, the major New York banks, and their prime customers having been caught by surprise.” Pictured below is a bread line in New York City during the Great Depression. Apparently the Wall Street insiders didn’t require this service.(*)

Bread Line The great depression was deliberately created and every depression since

Bread Line During The Great Depression

Jones quotes Herbert Hoover’s description of the Secretary of the Treasury, Andrew Mellon’s views, “Mr. Mellon had only one formula: ‘Liquidate labor, liquidate stocks, liquidate the farmers, [and] liquidate real estate.'” [Mellon] said, “It will purge the rottenness out of the system. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.”

“For those who knew the score,” stated Allen, “a comment by Paul Warburg had provided the warning to sell. That signal came on March 9, 1929, when the Financial Chronicle quoted Warburg as giving this sound advice: ‘If orgies of unrestricted speculation are permitted to spread too far … the ultimate collapse is certain … to bring about a general depression involving the whole country.'” “Sharpies [insiders] were later able to buy back these stocks at a ninety percent discount from their former highs,” he declared.

“FDR is probably best remembered for the New Deal,” stated Perloff. “Of courser, since a large portion of the work force was unemployed, there was not enough tax revenue to pay for these programs. So the government turned to its other source–borrowing. In effect, the international bankers, having created the Depression, now loaned America the cash to recover from it.” He added, “Naturally, the interest on these loans would be borne on the backs of taxpayers for years to come.”

The great depression was created deliberately and every depression since Migration

No Work During the Great Depression

The migration of families & individuals due to lack of jobs was evidently common during the Great Depression. Encyclopedia Britannica describes the Great Depression as the “Longest and most severe economic depression ever experienced,” which “precipitated economic failures around the world” and triggered “major changes in the structure of the U.S. economy.” “To think that the scientifically engineered Crash of ’29 was an accident or the result of stupidity defies all logic,” concluded Allen.

Summary

This evidence suggests that The Great Depression was artificially created so the larger Wall Street firms, which control the stock market, could eliminate competition and make profits out of lending America money to recover from it.

“Competition is a sin.”
-John D. Rockefeller

http://www.thehiddenevil.com/crash.asp

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