The biggest scam in history

[Atilla]

Crazy to us, thinking like we think, but not crazy to the organised debt system....pure logic in that sense.

Bad timing or true logic? How so?

 

[Paul71]

So we've had a few banks go belly up, but the debt still remains, it's just transferred.

By got goolies you the.

Work that one out.

 

[Paul71]

Bad timing or true logic? How so?

What do you mean, mate? (sorry, had a few beers)

 

[Atilla]

So we've had a few banks go belly up, but the debt still remains, it's just transferred.

By got goolies you the.

Work that one out.

Now I understand what you mean by 'pure logic'!

 

[arabianights]

I prefer to think of them as morons than devious scammers...

 

[chilltrader]

From Marketwatch:

"yesterday, treasury secretary henry paulson proposed a plan whereby the federal government (also known as YOU THE TAXPAYER) would set up an entity to absorb the bad debt generated by the financial services companies in this country. think of it this way, if you had a joint investment account with your best friend and they took all of the profits and you were left with all of the losses, how would you feel? so now the government is saying that when these companies make money, the executives get big fat salaries and bonuses; when they go bankrupt, the u.s. taxpayer covers the debt. if these companies know that no matter how many bad loans and investments that they make that the government will bail them out, what is to stop them from continuing to do so? RIGHT NOW, THIS BAILOUT WOULD AMOUNT TO AROUND A HALF TRILLION DOLLARS. THAT IS $5000 FOR EVERY WORKING ADULT IN THIS COUNTRY. i know that i have better ways to spend $5000 of my money. please take a moment to send an email, letter or call your congressman/woman or senator and tell them that this is unacceptable. if they are running for reelection, tell them that if they vote for a bailout that you will vote for their opponent no matter the party affiliation. there are links at the bottom of this post to the house of representatives and senate websites. feel free to forward this information to your family and friends because they will have to pay as well if this plan goes through.

United States House of Representatives, 110th Congress, 2nd Session

U.S. Senate

"

 

[Atilla]

From Marketwatch:

"yesterday, treasury secretary henry paulson proposed a plan whereby the federal government (also known as YOU THE TAXPAYER) would set up an entity to absorb the bad debt generated by the financial services companies in this country. think of it this way, if you had a joint investment account with your best friend and they took all of the profits and you were left with all of the losses, how would you feel? so now the government is saying that when these companies make money, the executives get big fat salaries and bonuses; when they go bankrupt, the u.s. taxpayer covers the debt. if these companies know that no matter how many bad loans and investments that they make that the government will bail them out, what is to stop them from continuing to do so? RIGHT NOW, THIS BAILOUT WOULD AMOUNT TO AROUND A HALF TRILLION DOLLARS. THAT IS $5000 FOR EVERY WORKING ADULT IN THIS COUNTRY. i know that i have better ways to spend $5000 of my money. please take a moment to send an email, letter or call your congressman/woman or senator and tell them that this is unacceptable. if they are running for reelection, tell them that if they vote for a bailout that you will vote for their opponent no matter the party affiliation. there are links at the bottom of this post to the house of representatives and senate websites. feel free to forward this information to your family and friends because they will have to pay as well if this plan goes through.

United States House of Representatives, 110th Congress, 2nd Session

U.S. Senate

"

Absolutely RIGHT!

When talking about gun & knife crime the arguement is we don't need knee jerk reactions we need to think about these bills as they go through court. Now overnight a decision is passed which transfers losses from shareholders to the public. Literally trillions of dollars.

Someone quoted "Profits privatised - Losses socialised". How can that be?

We are told this is in the long term for the better interest of all of us. Yeah right.

We are officially in a communist system imo. State owned banks and corporations that can't stand on their own feet.

Wonder how they will deal with General Motors and 000s of job losses?


To date, other than Northern Rock executive retiring on health grounds not one banker - NOT ONE BANKER - has been held to account. BUT many have been given golden handshakes.

 

[JTrader]

THE BIGGEST SCAM IN HISTORY

Yes, the central banks are privately owned by the likes of the Rothschilds. The illuminated ones. They are our Masters, Apparently.

The Money Masters - How International Bankers Gained Control of America
"The powers of financial capitalism had a far-reaching plan, 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...Their secret is that they have annexed from governments, monarchies, and republics the power to create the world's money..." THE MONEY MASTERS is a 3 1/2 hour non-fiction, historical documentary that traces the origins of the political power structure that rules our nation and the world today. The modern political power structure has its roots in the hidden manipulation and accumulation of gold and other forms of money. The development of fractional reserve banking practices in the 17th century brought to a cunning sophistication the secret techniques initially used by goldsmiths fraudulently to accumulate wealth. With the formation of the privately-owned Bank of England in 1694, the yoke of economic slavery to a privately-owned "central" bank was first forced upon the backs of an entire nation, not removed but only made heavier with the passing of the three centuries to our day. Nation after nation, including America, has fallen prey to this cabal of international central bankers. Segments: The Problem; The Money Changers; Roman Empire; The Goldsmiths of Medieval England; Tally Sticks; The Bank of England; The Rise of the Rothschilds; The American Revolution; The Bank of North America; The Constitutional Convention; First Bank of the U.S.; Napoleon's Rise to Power; Death of the First Bank of the U.S. / War of 1812; Waterloo; Second Bank of the U.S.; Andrew Jackson; Fort Knox; World Central Bank.............

The Money Masters - How International Bankers Gained Control of America



The Money Masters

“Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money."
Sir Josiah Stamp - Director of the Bank of England (appointed 1928)
Reputed to be the 2nd wealthiest man in England at that time.

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
... The modern theory of the perpetuation of debt has drenched the earth with blood, and crushed its inhabitants under burdens ever accumulating. -Thomas Jefferson

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

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

The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity. -Abraham Lincoln

Issue of currency should be lodged with the government and be protected from domination by Wall Street. We are opposed to...provisions [which] would place our currency and credit system in private hands. - Theodore Roosevelt

Despite these warnings, Woodrow Wilson signed the 1913 Federal Reserve Act. A few years later he wrote: I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. 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. -Woodrow Wilson

Years later, reflecting on the major banks' control in Washington, President Franklin Roosevelt paid this indirect praise to his distant predecessor President Andrew Jackson, who had "killed" the 2nd Bank of the US (an earlier type of the Federal Reserve System). After Jackson's administration the bankers' influence was gradually restored and increased, culminating in the passage of the Federal Reserve Act of 1913. Roosevelt knew this history.

The real truth of the matter is,as you and I know, that a financial
element in the large centers has owned the government ever since
the days of Andrew Jackson... -Franklin D. Roosevelt
(in a letter to Colonel House, dated November 21, 1933)

 

[JTrader]

Alex Jones' Prison Planet: The truth will set you free!

Understanding the Crisis

Llewellyn H. Rockwell, Jr.
Saturday, September 20, 2008

What caused this? It is a simple question, and yet answers are all over the map, as you might expect. Here’s mine in two words: fiat money. The word fiat means: out of nothing. Money out of nothing is money that is eventually worth nothing. The possibility of precisely that happening emerged on August 15, 1971. Since Nixon severed the last tie of the dollar to gold, the world’s monetary system has not been restrained by anything physical. We’ve depended on the discretion of central bankers. We can’t trust that, and this crisis shows precisely why.

Of course there are subsidiary factors. The lifting of restrictions on Freddie and Fannie. Subsidized lending. The Fed’s artificially low interest rates. The Community Reinvestment Act. Financial “deregulation.” The war. Bush profligacy. Debt. There is much more besides. But fighting each of these forces individually is like battling down flies at the garbage dump. The core issue is that there is nothing to restrain money creation.

The first time that people hear this, they find their minds rather boggled, and they want to know more. My whole experience in this area is that once people start digging around the area of monetary theory, they find that 1) it is not as difficult a subject as it seems, 2) it is endlessly fascinating, and 3) it explains far more than they realized before.

It was F.A. Hayek who bore this burden most directly for those in the English-speaking world. His books on the source of the business cycle and what to do about it appeared in the late 1920s and throughout the 1930s. These works were cited by the Nobel Prize Committee in 1974 as his most important contribution to economic thought. His ideas are directly applicable to our current plight.

It has been a real tragedy that these works have been out of print. But this year, the Mises Institute made a hard push to get this book out in time for the current financial calamity. We set other projects aside and worked all hours to bring out the definitive collection. Here it is: Prices and Production and Other Works on Money, the Business Cycle and the Gold Standard, by F.A. Hayek.

The book is priceless in its content and presentation. Specifically, Hayek explains the mechanism by which loose credit generates false signals to investors, leading them to chase fads all over the market, and ending in sector-wide failures. He was writing at a time when the gold standard provided partial restraint on the government and the central bank. No more. So Hayek’s analysis of all of this is more penetrating than ever. The book also contains the complete text of his many battles with Keynes.

At this link, you can buy what we are calling the Crisis Book Kit at a deep discount. Just click the books you want and the discount happens.

At the same time he was writing, his mentor Ludwig von Mises was battling it out in Austria and the German-speaking world. He became the great opponent of not only inflationary finance but also the Continent’s version of the New Deal. The remarkable thing is that these essays were not translated until the 1980s and even then remained obscure. This book is really their first major debut, and it appeared only last year: The Causes of the Economic Crisis. You will see his expository virtuosity at work and also his amazing courage and passion.

It has been a major task of the Austrian school since 1912 to explain to people what money is, how it works, and how its corruption and distortion by the state is the source of both inflation and business cycles. The core book here is Mises’s own 1912 classic called The Theory of Money and Credit, written at the dawn of the central banking age. The prose is still crystal clear, and it continues to be the best textbook on money ever written.

In the American context of the Great Depression, one book captures the whole onset and response. It is Murray Rothbard’s America’s Great Depression. He shows that it wasn’t the 1929 crash that was the problem; it was the response to the crash that created the Depression. Bailouts. Price controls. Wage controls. Government programs. Trade restrictions. Crackdowns on the capital markets. And who did all this? It originated not with FDR but with Herbert Hoover – clear echoes of today. There is no understanding the present crisis without this book.

Finally we need to realize the problem of loose money and its effects are not new and not necessarily 20th century. The whole history of the American economy is littered with banking panics, bailouts, business cycles, and chaos, each with the same root. When the money goes bad, everything goes bad. Rothbard chronicles the long history of his marvelous book: History of Money and Banking in the United States.

The Mises Institute has sponsored research on this topic since it was created in 1982. Our first conference was on the gold standard. We’ve suffered for this choice. The best way to fall out of favor with the regime – or its libertarian and neocon supporters – is to question its central bankers. We’ve done that. But now, the work is done. It is available. The truth is out there. You only need to grab it, comprehend it, and spread it.

Please help. History hangs in the balance.

 

[Scott47]

I guess Gordon Brown never read "The theory of money and credit"...

 

[JTrader]

Alex Jones' Prison Planet: The truth will set you free!

What’s Behind the Financial Market Crisis?

Antony Mueller
Mises.org
Friday, Sept 19, 2008

The financial crisis is not over. Neither tax rebates nor low interest rates nor higher or lower exchange rates can do the job of reviving an economy that is burdened by debt loads that are too high. On the contrary: the policy measures that the US authorities have been applying will prolong the agony. Be prepared for the challenges of extended financial turmoil and economic stagnation.

Early this year, the US central bank decided to manage the debt crisis in the light-hearted belief that a few aggressive rate cuts would “unfreeze” the banking system. Yet as of the end of the third quarter of 2008, the arteries of the financial system are still cluttered, and the financial system has moved even closer to total collapse.

Those banks and brokerages that haven’t yet failed have been kept alive by emergency monetary transfusions from the US central bank. The Fed has cast away all restraints of economic rationality and is acting in a purely political way. The Board of Governors of the US Federal Reserve System is pursuing the goal of getting the financial system through the mess — at least until the end of the year, no matter how high the costs will be thereafter.

The American central bank has adopted the financial equivalent of the military strategy of scorched earth. The economic philosophy of the current chairman of the US Federal Reserve System can be summarized in the slogan, “No depression under my rule!” He resembles a military leader who stubbornly declares, “No defeat under my rule!” the more the chance of victory is slipping away, and defeat can be denied no longer.

The current economic disaster is the result of the combination of negligence, hubris, and wrong economic theory. For decades, an economic and monetary policy has been practiced based on the illusion of, “It doesn’t matter.” At first it was, “Deficits don’t matter.” From that, the policy of “it doesn’t matter” got extended to money creation, the credit expansion, the stock-market bubble, and the housing boom. Now, we’re being told that buying financial junk by the central bank to beef up banks and brokerages also doesn’t matter.

As a byproduct of this mindless economic and monetary policy, financial market operators, too, have lost their heads. Trusting the official cheerleaders, investors hold on in the trenches until they will have lost their last shirt. Economic weakness is spreading around the globe. There is no new spurt of economic growth in sight. Yet many investors stay put because they have been conditioned to believe that government will bail them out.

The current financial crisis is not of a cyclical nature. The financial turmoil is the symptom of the structural imbalances in the real economy. Over decades, expansive monetary policy has gone hand in hand with implicit and explicit bailout guarantees, and this has distorted the process of capital allocation. Under such perverted conditions, those investors will win most who cast away the restraints of prudence. It is a game that can go on for a long time — up to the point when the irrationality has become systemic.

The behavior of the investment community reflects the incentive structure that has been put in place by the authorities. Investors have learnt to dance to the tunes of the pied pipers at high places. After all, the individual market player could see from those who were ahead of him in the abandonment of prudence how money is being made. In the wake of this, financial companies have become overextended and are now in need of deleveraging. Yet the core problem lies in the imbalances of the real economy.

In the Austrian theory of the business cycle, the distinction is made between the “primary” and “secondary” depression. The secondary depression is what catches the eye: the turmoil in the financial markets. Yet the underlying cause is the distortion of the economy’s capital structure: the primary depression.

The simple fact is that the US economy is burdened with a highly lopsided capital structure as the consequence of a wide discrepancy between consumption and production, which, in turn, is the result of monetary policy. Persistent trade imbalances are the symptoms of this discrepancy. This means for the US economy that lower interest rates and government incentives aimed at boosting consumption work as pure poison. Instead of more consumption, more savings, less consumption and fewer imports are needed.

The current financial crisis reflects that many debtors have reached their debt limit and that creditors are lowering that limit. From now on, business and consumers, governments and investors must work under the restraints of lowered debt ceilings.

Economic policy as it is currently practiced is in a fix: lower interest rates may temporarily help to alleviate the financial crisis, but they exacerbate the fundamentals that are the cause of the financial crisis. Equally, a lower dollar would make imports costlier for the United States, while a strong dollar comes with lower import prices. But while a low dollar would help to expand exports, a strong dollar impedes export growth. Therefore, the United States will have high trade deficits as long as the economy does not fall deeper into recession.

Without an adaptation that would increase savings, decrease consumption, and reduce imports, the US economy can only go on in the old fashion with ever more debt accumulation. But the limit of debt expansion has been reached. The financial crisis has reduced the willingness of domestic and foreign creditors to extend loans.

Foreign creditors are getting ready to reduce their holding of US debt in a more drastic way. The governmental takeover of the mortgage agencies Fannie Mae and Freddie Mac bailed out the monetary authorities of China, Japan, Russia, and other foreign countries that hold agency debt. As a result of the socialization of the so-called government-sponsored enterprises, the Treasury opened a window of opportunity for these countries to unload their US assets at subsidized prices, all at the cost of the US taxpayer.

A profound restructuring of global capital has become unavoidable. Such a process is quite different from a recession in the traditional sense. In contrast to a sharp and typically short-lived recession, when, after the rupture, business as usual can go on, the restructuring of a distorted capital structure will require time to play out. Rebalancing the distorted capital structure of an economy requires enduring nitty-gritty entrepreneurial piecemeal work. This can only be done under the guidance of the discovery process of competition, as it is inherent in the workings of the price system of the unhampered market.

Anticyclical fiscal and monetary policies are of no help when it comes to the daily toil in business to work towards reestablishing a balanced capital structure. The so-called income multiplier won’t work, and lower interest rates won’t stimulate spending. On the contrary: these policy measures only make the task of the entrepreneur harder.

The difficulties ahead arise from the problem that business as usual cannot go on under conditions of a credit crunch, which has its roots in the distortions of the economy’s capital structure. Thus, even if the financial market turmoil were to settle, there won’t be the simple resumption of the old ways of doing business. The belief that, after the financial crisis is over, the real economy can reemerge unscathed, is probably the greatest error that many investors share with the policymakers.

As a result of the bailouts and the socialization of the mortgage agencies, the financial system is now fully infected with moral hazard. The disastrous effects of these government interventions will show up soon. The major task of bringing the capital structure in order is still ahead and more pain is in the waiting.

As long as governments and central banks continue to focus on the monetary symptoms of the “secondary depression” and continue to ignore the structural aspects of the “primary depression,” they act like quacks. Ignorant of the lessons of the Austrian School, the authorities will most likely continue with their disastrous policies.

 

[JTrader]

Alex Jones' Prison Planet: The truth will set you free!

The Fed’s Weekend At Bernie’s

George Washington Blog
Friday, September 19, 2008

In the movie “Weekend at Bernie’s”, a couple of young executives try to create the illusion that their murdered boss is alive in order to avoid being questioned about it. They move his arms and legs and pretend he’s moving in order to keep the charade going (watch the trailer).

Bernanke, Paulson, the White House and bozos in Congress like Frank and Dodd are pulling a Weekend at Bernie’s with the economy. The U.S. economy is dead. America is broke. The derivatives house of cards is falling down. The credit orgy has left the banks hungover and without any money. The American people have tapped out their credit cards and are starting to live on fumes.

But the boys are borrowing trillions more to move the arms of the U.S. economy, to pick up one foot at a time to pretend that it is still moving and breathing.

It is comical. As soon as they pick up the right arm, another part of the body economic slumps . . . . and in picking up that up, the right arm falls again.

The feds brokered the Bear-JP Morgan deal, but then Indymac collapsed. They took over Freddie and Fannie, but then Lehman died. They propped up AIG, but then the money markets collapsed . . .

Pretty soon, the government will have to start playing both sides in conversations. You know, one government-operated company will “do business” with another government-operated company, so that it looks like there is commerce happening.

 

[JTrader]

Alex Jones' Prison Planet: The truth will set you free!

Grasping at Straws

MIKE WHITNEY
Counterpunch
Sunday, Sept 21, 2008

On Friday morning, Senator Christopher Dodd, the head of the Senate Banking Committee, was interviewed on ABC’s “Good Morning America.” Dodd revealed that just hours earlier at an emergency meeting convened by Secretary of the Treasury Henry Paulson and Federal Reserve chairman Ben Bernanke, lawmakers were told that “We’re literally maybe days away from a complete meltdown of our financial system.” Dodd added somberly, that in his three decades of serving in public office, he had “never heard language like this.”

The system is at the breaking point, and despite Wall Street’s elation from the proposed $1 trillion dollar bailout to remove toxic mortgage-backed debt from banks balance sheets, the market is still correcting in what has become a vicious downward cycle. This cycle will persist until the bad debts are accounted for and written off for or until the exhausted dollar-system collapses altogether. Either way, the volatility and violent dislocations will continue for the foreseeable future.

Most people don’t understand what happened on Thursday, but the build-up of bad news on the Lehman default and the $85 billion government takeover of AIG, triggered a run on the money markets and a freeze in interbank lending. The overnight LIBOR rate (London Interbank Offered Rate) more than doubled to 6.44 per cent. Bank of America reported overnight borrowing rates in excess of 6 per cent. Longer-term LIBOR rates also rose sharply. On Wednesday, jittery investors removed their money from money markets and flooded short-term US Treasurys for the assurance of a government guarantee on their savings even though interest rates had turned negative which means that their balance would actually shrink at the date of maturity. This is unprecedented, but it does help to illustrate how raw fear can drive the market.

The TED spread (the TED Spread measures market stress by revealing the reluctance of banks to lend to each other) widened and the credit markets froze in place. Borrowing three-month dollars on the interbank market and the U.S. Treasury’s three-month borrowing costs widened five full percentage points. That’s huge. The banking system shut down.

What does it mean? It means the Federal Reserve has lost control of the system. The market is driving interest rates now, and the market is terrified. End of story.

When the Fed announced its emergency program to dump $180 billion into the global banking system, short term Libor retreated slightly but long-term rates have remained stubbornly high. The noose continues to tighten. These rates are pinned to 6 million US mortgages which will be resetting in the next few years. That’s more bad news for the housing industry.

The entire system is deleveraging with the ferocity of a Force-5 gale touching down in the Gulf, and yet, Henry Paulson has decided that the prudent thing to do is build levees around the system with paper dollars. Naturally, many people who understand the power of market-corrections are skeptical. It won’t work. Libor is pushing rates upwards–that’s the “true” cost of money. The Fed Funds rate (2 per cent) is supported by infusions of paper dollars into the banking system to keep interest rates artificially low. Now the extreme pace of deleveraging has the Fed on the ropes. Trillions of dollars of credit is being sucked into a black hole which is raising the price of money. It’s out of Bernanke’s control. He needs to step out of the way and let prices fall or the dollar system will vanish in a deflationary vacuum.

The problems cannot be resolved by shifting the debts of the banks onto the taxpayer. That’s an illusion. By adding another $1 or $2 trillion dollars to the National Debt, Paulson is just ensuring that interest rates will go up, real estate will crash, unemployment will soar, and foreign central banks will abandon the dollar. In truth, there is no fix for a deleveraging market anymore than there is a fix for gravity. The belief that massive debts and insolvency can be erased by increasing liquidity just shows a fundamental misunderstanding of economics. That’s why Henry Paulson is the worst possible person to be orchestrating the so called rescue project. Paulson comes from a business culture which rewards deception, personal acquisitiveness, and extreme risk-taking. Paulson is to finance capitalism what Rumsfeld is to military strategy. His leadership, and the congress’ pathetic abdication of responsibility, assures disaster. Besides, why should the taxpayers be happy that the stocks of Morgan Stanley, Washington Mutual and Goldman Sachs surged on the news that there would be a government bailout yesterday? These banks are essentially bankrupt and their business models are broken. Keeping insolvent banks on life support is not a rescue plan; it’s insanity.

No one has any idea of the magnitude of the deleveraging ahead or the size of the debts that will have to be written down. That’s because 30 years of deregulation has allowed a parallel financial system to arise in which over $500 trillion dollars in derivatives are traded without any government supervision or accounting. These counterparty transactions are interwoven throughout the entire “regulated” system in a way that poses a clear and present danger to the broader economy. It’s a mess. For example, there are an estimated $62 trillion of Credit Default Swaps (CDS) alone, which are basically insurance policies for defaulting bonds. AIG was as heavily involved in CDS as they were in regulated insurance products. So why would AIG sell CDS rather than conventional insurance?

Because, just like the banks, AIG could maximize its profits by minimizing its capital cushion. In other words, it didn’t really have the capital to pay off claims when its CDS contracts began to blow up. If it had been properly regulated, then government regulators would have made sure that it was sufficiently capitalized with adequate reserves to pay off claims in a down-market. Now taxpayers will pay for the lawless system which men like “industry rep” Henry Paulson put in place. That’s deregulation in a nutshell; a system that allows Wall Street banksters to create credit out of thin air and then run weeping to Congress when their swindles backfire.

Inflating the currency, printing more money, and increasing the deficits won’t help. The bad debts have to be accounted for and liquidated. The Paulson strategy is to create another ocean of red ink while refusing to face the underlying problem head-on. This just further exacerbates the consumer-led recession which economists know is already setting in everywhere across the country. Demand is down and consumer spending is off due to falling home equity, job losses, and tighter lending standards at the banks. The broader economy does not need the added downward pressure from higher taxes, bigger deficits, or inflation. Paulson’s plan is a band-aid approach to a sucking chest wound. The debts are enormous and the pain will be substantial, but the problem cannot be resolved by crushing the middle class or destroying the currency.

The malfunctioning of the markets and the freeze-over in the banking system are the outcome of a massive credit unwind instigated by trillions of dollars of low interest credit from the Federal Reserve which was magnified many times over via complex derivatives contracts and extreme leveraging by speculative investment bankers. This has generated the biggest equity bubble in history. That bubble is now set for a “hard-landing” which is the predictable result of an unsupervised marketplace where individual players are allowed to create as much credit as they choose.

 

[JTrader]

Alex Jones' Infowars: There's a war on for your mind!

Wall Street Fascism

Robert Higgs
The Independent Institute
September 20, 2008

After several days of violent fluctuations, the world’s stock markets registered a massive increase in share prices on Thursday afternoon and on Friday, September 18 and 19, 2008. Why? As the Associated Press put it, “investors stormed back into the market, relieved that the government plans to restore calm to the financial system by rescuing banks from billions of dollars in bad debt. The Dow Jones industrials rose about 365 points, giving them a massive gain of about 775 over two days.”

Other stock markets also rose tremendously: on Friday the S&P 500 closed up more than 49 points, or about 4 percent; the Nasdaq closed up almost 75 points, or 3.4 percent.

Exactly what the government will do remains to be determined. Officials from the Treasury and the Fed and members of Congress intend to spend the weekend hammering out the details. Be afraid, be very afraid.

The impending measures come close on the heels of a series of wrong-headed actions undertaken by the government, including the bailout/takeover of Fannie, Freddie, and AIG; massive injections of new credit by the Fed and other major central banks; and the SEC’s prohibition of short-selling for almost 800 financial-company stocks. If, as anticipated, the Treasury moves next to assume the rotten paper currently being held by banks and other lenders (presumably mortgages and related securities, for the most part), then it is fair to conclude that the government has given up entirely on the free market and has decided to occupy the wasteland where outright socialism and economic fascism meet.

Of course, everyone engaged in this hysterical flailing will assert that the objective is only to save capitalism in a crisis. Such government saviors always make that claim, oblivious to its absurdity. Franklin D. Roosevelt and his gang claimed to be saving capitalism, too, but look at what was left of it when they had finished their work.




As economic historians witness the current machinations, they cannot help but recall the eerily similar events of August 13-15, 1971, another ill-fated weekend. At Camp David, President Richard M. Nixon huddled with his top economic advisers in an atmosphere of crisis and hastily crafted an extraordinarily inauspicious package of policy actions. As described in the 1972 Council of Economic Advisers Report, “The United States suspended the convertibility of the dollar into gold or other reserve assets, for the first time since 1934. It imposed a temporary surcharge, generally at the rate of 10 percent, on dutiable imports. Prices, wages, and rents were frozen for 90 days, to be followed by a more flexible and durable–but still temporary–system of mandatory controls.”

Herbert Stein, Nixon’s chairman of the Council of Economic Advisers, later recalled: “Even after 25 years I am amazed by how little we looked ahead during that exciting weekend at Camp David, when we (the president, really) made those big decisions.” Everybody seems to have assumed without discussion that after a 90-day wage-and-price freeze, the government would somehow ease back to a regime of free, flexible prices. However, “[a]s it turned out, we were in the price and wage control business not for 90 days but for nearly 1,000. [Moreover,] [w]e were in the business of controlling energy prices for much longer.”

Likewise, the emergency policies the government is currently concocting will certainly have extensive ramifications, many of the unanticipated, for years to come. The encouragement to moral hazard now being given to financial institutions promises to make them more reckless than the biggest plunger in Las Vegas. After all, any profit will go into their pockets, but any big losses, they will reasonably expect, will be sloughed off onto the taxpayers. Yes, indeed, that image shimmering on the horizon is Casino Capitalism. Henry Paulson, Ben Bernanke, and the rest of these statist saviors are making a mighty contribution to this country’s economic ruin.

Notice, however, that the investors love every bit of it, just as they did after Nixon audaciously displaced the broadcast of Bonanza to announce his New Economic Policy to the nation on Sunday evening, August 15, 1971. The people loved it, even those with money at stake. As Stein observed, “[t]he Dow-Jones Average rose 32.9 points on Monday after the President’s announcement–the biggest one-day increase up to that point.” Here then are two dates matched in history: August 16, 1971, and September 19, 2008. On those days, investors demonstrated that they were willing to sell the soul of capitalism for a shabby promise of temporary government salvation. What Stein wrote about the 1971 episode in his book Presidential Economics might with equal validity be written about today’s events: “This reaction is important to the history of economic policy in America. It shows how shallow was the general support in principle for the basic characteristics of a free market economy.”

How shallow it was; how shallow it remains. The question is, How many times can the government race its emergency bailout vehicle toward the cliff without dragging the entire economy irretrievably into the abyss of outright socialism or full-fledged, Mussolini-style economic fascism?

 

[SAINT]

  A note of appreciation from the rich          : Information Clearing House - ICH

 

[gamma]

Well It seems like the seeds were planted some 10 years ago for this rot.
I know of people on unemployment benefit getting mortgages for ridiclous amounts due to the new self-sert mortgage Lol!
I also know of people on sickness benefit betting MBNA cards with 5000 credit limits one character I knew had credit cards limits totalling 90,000 his total income was all he got on DLA.
He found it quite amusing that no one questioned his income and was applying for cards like they were going out of fashion. Now I know there is the issue of "obtaining money by deception"i.e fraud.
But have you tried making a fraud charge stick against someone who is certified as mentally unstable specially in the u.k?

 

[Atilla]

Well It seems like the seeds were planted some 10 years ago for this rot.
I know of people on unemployment benefit getting mortgages for ridiclous amounts due to the new self-sert mortgage Lol!
I also know of people on sickness benefit betting MBNA cards with 5000 credit limits one character I knew had credit cards limits totalling 90,000 his total income was all he got on DLA.
He found it quite amusing that no one questioned his income and was applying for cards like they were going out of fashion. Now I know there is the issue of "obtaining money by deception"i.e fraud.
But have you tried making a fraud charge stick against someone who is certified as mentally unstable specially in the u.k?

Well if I have to subsidise those poor bankers out of my tax payments, when I get to a ripe old pensionable age, I will have a few tricks of my own to bestow on their wisdom...

Shareholders should be paying for these losses not tax payers.

Anyone who frauds the system has my support. Freaking ******s still getting bonuses and golden hand shakes.

FSA lady tells us in these demanding times we need the best skills to manage us out of this crises.... AAAAAAAAAAAARRRRRRRRRRGGGGGGGGGGGGHHHHHHHHHHHHH

 

[gamma]

FSA lady tells us in these demanding times we need the best skills to manage us out of this crises....

Is she talking about the same people who used their skills to get us into the crises in the first place

 

[JTrader]

Money as Debt

Money As Debt

Money As Debt
Paul Grignon's 47-minute animated presentation of "Money as Debt" tells in very simple and effective graphic terms what money is and how it is being created. It is an entertaining way to get the message out. The Cowichan Citizens Coalition and its "Duncan Initiative" received high praise from those who previewed it. I recommend it as a painless but hard-hitting educational tool and encourage the widest distribution and use by all groups concerned with the present unsustainable monetary system in Canada and the United States.

 

[JTrader]

How a Group of International Bankers Engineered the 1929 Crash and the Great Depression Friends of the American Revolution