Archive for the ‘Banking’ Category
by Nicholas Testaccio
The Speaker of the House and the President reached an agreement on the Debt Ceiling. Hoorah! This is, of course, simply a show for the masses to watch and obsess over in order to be distracted and deterred from logic and reason while the elite salivate.
Let’s review. Article I, Section 8
Clause 1: “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States…”
Clause 2: “To borrow Money on the credit of the United States;”
Clause 5: “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;”
Now you know everything there is to know about why we have a “debt ceiling”, and how this affects the operation of our government. Or do you?
I am one of those unfortunate souls who is not satisfied with the rhetoric, or the mountains of political speech and questionable expertise spewed out by the pundits and talking heads paraded for our entertainment. We must never validate as legitimate anyone who comes out to certify the pure rubbish that is now a government of, by, and for the self-promoters and political pirates.
In his letters, using the nom de plume Federal Farmer, Richard Henry Lee wrote, “Should the general government think it politic, as some administrations (if not all) probably will, to look for a support in a system of influence, the government will take every occasion to multiply laws, and officers to execute them, considering these as so many necessary props for its own support.”
In the many years since the ratification of the Constitution, and Lee’s forecast of what is now a bloated government that will saddle future generations with a yoke so heavy that they will find it difficult to place nutrition on the table, “public officials” have devised numerous ways to put us into a deep hole. If anyone thinks that we can pay off this debt, they must be living within a delusional world.
Nevertheless, this government, aided by the corporate press, puts on this Punch and Judy show for the masses on a regular basis. The public must live in fear that we might default on our debt, and Heaven forbid some of the Billions of dollars doled out every year for programs, pork, and price-gouging enterprise contrary to the few delegated authorities of the government might be cut.
Lee goes on to address the situation, “The internal sources of taxation then must be called into operation, and internal tax laws and federal assessors and collectors spread over this immense country.” It goes without saying that we are far beyond that point, having taxed the public, unlawfully I might add, to pay for the corruption that flows from both federal and state government. Significantly, our Declaration decries this very abuse, “He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.”
I say taxed the public unlawfully because, yes I have read 26 U.S.C., Supreme Court cases related to the Sixteenth Amendment, and others showing that the current application of the “income tax” does not, in any way, reconcile with what is written in the code. For brevity’s sake, the Supreme Court ruled that the Sixteenth Amendment gave congress no new power to tax, but rather prevented taking a direct tax and placing it into the category of an excise tax. 26 U.S.C. confirms this by detailing what sources and activities create a liability to pay an “income tax.” It should be noted that the IRS claims that you cannot use what is clearly written in the code to “determine taxable income.” That alone should tell you where we will eventually wind up. Let’s drudge onward.
In Clause 2, congress has the power “To borrow money on the credit of the United States.” Up until 1971, when Nixon took us off the gold standard, money was in the form of a tangible asset such as gold or silver. Now, it is fiat. Fiat, in the case of the current monetary system, means nothing more than arbitrary. By decree! Make it so! Through some agreements, such as Bretton Woods, and using the U.S. Dollar as the acceptable currency in exchange for Crude Oil, we have been able to buy and sell goods and services throughout the World with nothing more than paper. The system now in place is essentially a sham, and we borrow nothing more than that, which we can simply print.
Alexander Hamilton, our first Treasurer, wrote “In the opinion of the Secretary, the wisdom of the House, in giving their explicit sanction to the proposition which has been stated, ["That an adequate provision for the support of the Public Credit, is a matter of high importance to the honor and prosperity of the United States."] cannot but be applauded by all, who will seriously consider, and trace through their obvious consequences, these plain and undeniable truths.” He goes on to note that there will be circumstances by which even wealthy nations may be forced to borrow money. By no means, today, is the U.S. forced to borrow money when it has already exhibited that it is more than willing to create Billions to bail out the “too big to fail”, or in its quest to convert this country to a communist nation by issuing checks to we peons to keep us satisfied in a time of crisis.
Clause 5: gave congress the authority “To coin Money, regulate the Value thereof…’, but that all changed with the creation of the Federal Reserve, and other schemes put into place. So, the question is, as to what we are borrowing, and what are they who are buying our debt are lending us? And what happens if nations decide that the U.S. Dollar should no longer be the reserve currency, opting for another system such as a currency based on a hard asset?
Much of what we are experiencing is a house of ...
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The following is a comprehensive list of all representatives that voted against an audit of the "Privately Owned" Federal Reserve Bank.
http://www.campaignforliberty.com/materials/HR1207-Shame-List.pdf
We feel that every representative should have stood in favor of this important legislation for several reasons.
The primary, and most basic reason being that in the 97 years of its operation the Federal Reserve has NEVER been audited. EVER!
Do you think perhaps it is overdue? Especially in light of what has transpired with the economy in the last 24 months?
Can any of these representatives offer a valid reason for voting aginst this legislation? I dont think so, and we here at RTR have heard them all.
1. The most ridiculous being that it would disrupt operations and pose a risk to the recovery. What recovery? Most recently: Wells Fargo laying off 2,800, Microsoft laying off 5,800, and the tens of thousands that have lost their jobs?
High unemployment, and a moribund housing market have increased risks to the U.S. economic recovery, while the public debt looms large and needs to be cut.
2. Investors were worried that greater political influence in the Fed's operations, could weaken the central bank's resolve to fight inflation in the future. Please note, the dollar has lost approximately 95% of it's value since the Fed came into being in 1913. I think the Fed, based upon this fact, is losing it's battle against inflation.
The U.S. House of Representatives had approved a bill in December of 2009 that included a provision, championed by Texas Representative Ron Paul, that would have opened the Fed's dealings to audits much the same as agencies of the government. But in a statement on June 15 of this year, House Democrats participating in negotiations over a final financial reform bill signaled a willingness to live with a narrower Senate audit provision that does not cover monetary policy.
The Fed, which has admitted it was too complacent about regulatory oversight in the run-up to the global financial crisis, has come under heavy fire for being too close to the banks it regulates. So, in the end, the U.S. central bank appears to be emerging largely unscathed by the regulatory reform efforts. It successfully fought off a Senate push In May 2010, that would have stripped it of its oversight of smaller banks, and is poised to emerge as the most powerful financial regulator when reforms are complete.
If you agree with us that this legislation should have passed, then exercise your right in the next election cycle and vote out those who failed once again to do the right thing, and uphold their oath to defend, and protect the Constitution of the United States of America.
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Jesse's Cafe Americain
“I have to think this train is probably going to leave the station soon and we need to focus our efforts on explaining the story as best we can. There were too many people involved in the deals -- too many counterparties, too many lawyers and advisors, too many people from AIG -- to keep a determined Congress from the information.”
James P. Bergin, NY Fed, in an email to his Fed colleagues
'Though it is hard to divine much understanding from the unredacted filing, it has become clear that Goldman had more involvement than previously believed: In addition to the credit default swaps it bought from AIG, the filing shows that Goldman Sachs also originated many of the underlying assets that AIG and the New York Fed bought back from Société Générale.
The American people have the right to know how their tax dollars were spent and who benefited most from this back-door bailout," said Kurt Bardella, spokesman for Issa. "Now that it's public, let's see if the sky really does fall as the New York Fed said it would to justify its coverup."
Other lawmakers believed that the New York Fed was trying to hide its ties to Goldman Sachs.' AIG Reveals the Story - CNN
"Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.
We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system -- apart from the matter of AIG’s bailout -- deserves further congressional scrutiny...
By pursuing this line of inquiry, the hearing revealed some of the inner workings of the New York Fed and the outsized role it plays in banking. This insight is especially valuable given that the New York Fed is a quasi-governmental institution that isn’t subject to citizen intrusions such as freedom of information requests, unlike the Federal Reserve.
This impenetrability comes in handy since the bank is the preferred vehicle for many of the Fed’s bailout programs. It’s as though the New York Fed was a black-ops outfit for the nation’s central bank...
New York Fed staff and outside lawyers from Davis Polk & Wardell edited AIG communications to investors and intervened with the Securities and Exchange Commission to shield details about the buyout transactions, according to a report by Issa.
That the New York Fed, a quasi-governmental body, was able to push around the SEC, an executive-branch agency, deserves a congressional hearing all by itself." Secret Banking Cabal Emerges From AIG Shadows - Reilly - Bloomberg
And this is the same Federal Reserve that was proposed by the Obama economic team to be the 'super regulator' with broad powers and consumer protection responsibilities over the entire financial system.
The Fed is a private agency, quasi-governmental, but not subject to discretionary audit or review by the government, except at arms length, through managed testimony. They make a point of demanding secrecy and independence at their own discretion, oversight on their terms.
This is a choice promoted by Geithner and Summers, who are creatures of the Fed and the banking system, almost sure to return to sinecures there after leaving government. And it is tempting choice for a president and congressmen of a weak character. If the Fed bears the responsibility they do not have to budget money and manage the process, and they can point fingers at its every failure. It is a formula for conflicts of interest, soft bribery and corruption. Confidence does matter.
The Fed and Blackrock are becoming to the Obama Administration what Halliburton and KBR were to Bush and Cheney, and the banking crisis -- the new Iraq. Can the handling of it be so inept that it becomes Obama's Watergate as well?
The Fed must be audited, and its power to disburse public money to private banks, except in the normal course of open market operations, curtailed. Only the Congress has the right to tax the people, and the Fed's ability to disburse billions of funds at its own discretion to domestic and foreign banks is a de facto form of taxation, since the Fed operates on a cost plus basis, without budgetary allotment from the Congress. The obligations of the Federal Reserve flow directly from its balance sheet, which is the basis for the national currency.
And despite the arguments from the Financial Times to 'stop snooping' the press and the Congress should delve deeply into the AIG bailout, because enough has already been exposed that it smells to high heaven.
It is remniscent of Watergate and Enron to see Timmy, Ben, and Hank falling all overthemselves in establishing that they had no knowledge or involvement in the payments of billions to AIG.
The truth must come out.
My own suspicion is that Goldman 'set up' AIG for a proper face ripping with its financial arrangements, playing both sides of the deal. There is further evidence of money flowing from Goldman to AIG executives before the bailout occurred. And at the least the major players saw what was happening and turned a blind eye to it, busying themselves with other things and establishing their plausible deniability.
A proper investigation can establish any specific guilt. It is a shocking scandal that the FBI and Justice Department are still not more actively involved in real investigation rather than these staged hearings.
But this incident should make it absolutely clear why the Fed cannot enjoy the expansion of its role as the regulator of the system. It is too conflicted in its mission of monetary independence, and at the same time the creature of the banks, to be a true civil servant fully answerable to the Congress.
Yes I understand the distinctions between the Fed Board of Governors and the NY Fed with regard to FOIA requests, and the appointmet process. What I am saying is that the distinctions obviously do not hold, do not work. The Fed is one organization. These distinctions are remniscent of the banking scandals exposed by then AG Elliot Spitzer. They simply do not work. They are ...
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Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." - John Maynard Keynes, 1919
Part I
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." - Ludwig Von Mises, Human Action, a Treatise on Economics, (Fox & Wilkes, 4th rev. ed., 1963)
Part II
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In the article JPMorgan $29 Billion WaMu Windfall Turned Bad Loans Into Income from Bloomberg, the authors explain how the bank turns fiction into more fiction.
The article states, and I quote; “Faced with the highest U.S. unemployment in 25 years and a surging foreclosure rate, the lenders are seizing on a four- year-old rule aimed at standardizing how they book acquired loans that have deteriorated in credit quality. By applying the measure to mortgages and commercial loans that lost value during the worst financial crisis since the Great Depression, the banks will wring revenue from the wreckage, said Robert Willens, a former Lehman Brothers Holdings Inc. executive who runs a tax and accounting consulting firm in New York.”
This is old news, but the major media either doesn’t catch on, or it is simply proving that it is bought and paid for by a corrupt banking cartel. I could say the same for our congress, and legislatures, but I hope it is becoming obvious to the masses.
Once more for those with MBA’s, and accounting degrees, we have a FIAT monetary system. What does this mean you ask? Despite the fact that you attended a university, and they gave you a sheet of paper stating that you actually graduated, you either still don’t get it, or are turning a blind eye. The money did not exist to begin with. It was created out of thin air, which means that the money for a loan, for example, is created by the signature of the borrower. There is no actual transfer of dollars from the net to another net position.
The lender applies the money as a credit to its books, and an accounts receivable is created upon the fictitious debt. It’s all make believe in a world designed to create wealth out of nothing but ink on pieces of paper.
If the money did not exist from the outset, what risk does the lending institution have? In actuality there is none to the financial institution except in the methodology of keeping the books under Generally Accepted Accounting Principles.
When the money is created, the interest on that loan does not exist, nor is it created. If the loan is $1,000,000 and the interest on the loan is .07% there will always be a shortfall in the supply of money. If the loan happens to be a 30-year loan then the payout over that period amounts to $2,395,087. That means that there is a shortfall of $1,395,087 in the money supply.
Extrapolate over time, and several loans, and the deficiency in the supply of money can amount to quite a large sum. Now add to that the fact that loans are bundled up, and sold off creating additional accounting without the necessary money created to be applied to other interests, or whatever it is that the purchaser of a derivative might hope to obtain. The FIAT money is drawn from accounts, but real, solid, whole property is not at hand in order to compensate for all the wrangling that is going on. It’s a pyramid type scheme that is wholly embraced by our government.
Explore from the point of credit derivatives, and you begin to see the problem unfold over the long haul. Billions of sheets of paper created that are based on a limited true value piece of property, without creating the means to pay any of it back. The value of the property is subject to the whims of an economic system that can be manipulated quite easily. Therefore if the money powers decide a recession is due, then they can easily manipulate the economy down because only a small portion of the system has true value.
In the short run, those who understand the system take advantage of the false accounting principles. They reap huge profits, and bonuses until it starts to unravel. Who is holding the bag on this Ponzi scheme?
Ponzi scheme? “A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned. The Ponzi scheme usually offers returns that other investments cannot guarantee in order to entice new investors, in the form of short-term returns that are either abnormally high or unusually consistent.”
When congress abrogated its constitutionally mandated responsibility to control the monetary system the outcome was that it left the People with the tab for the coming slaughter. Massive taxes will need to be imposed on all the lambs out there who thought they were getting their just reward.
Since the borrowing of money has become an intricate, or more correctly a totally unnecessary part of maintaining the monetary system we are left with the problem of repayment. Hopefully we understand that the failure to create the means to produce anything of substance will lead us to bankruptcy. http://drudgereport.com/flashocs.htm
By allowing the government to create an unconstitutional enterprise such as the FED, we have given the greedy, and dishonest the ability to control every aspect of the monetary system, and therefore our lives.
We the People need to step back and review. Forget about what we’ve been told, and clear our minds of the rumbling that is taking place between our ears.
On one hand we have the growing unemployment rate, and a congress all too willing to bail out, or confiscated some industry all for the illusion that they are doing something about our financial problems. Our problems were caused by a callous and corrupt congress to begin with so we want them to stop. Just shut up, release those industries that you have destroyed through massive regulation, and allow the little guy to grow his own enterprise without having to fear some regulation, or non-constitutional bureaucrat who loves the feel of the power to destroy.
Congress should be doing everything within their limited power to rectify the situation since much of it has been caused by their outright corruption, and disdain for a vibrant economic system where people are allowed to create.
Congress can regulate trade, ...
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