The factors that determine social class vary widely from one society to
another with different people or groups within society having very different
ideas about what makes one "higher" or "lower" in the social hierarchy.
A complete discussion of social class is beyond the scope of this article,
and I want to focus on the most basic class distinction: that is, between
the powerful and the powerless, and how the conflict is waged on the political,
social, economic, and spiritual fronts.
Perhaps Manfred Davidmann
summarized the struggle between the classes best...
"What we see all around us is conflict between authoritarian minds wishing
to dominate, control and exploit on the one hand and, on the other hand,
citizens wishing to maintain and improve the standard of living and quality
of life for the population as a whole by democratic (grassroots level) decision-taking."
Throughout history, mankind has witnessed authoritarians who only want
to dominate, control and exploit the population. Social classes with more
power usually subordinate classes with less power, while attempting to cement
their own power positions in society. The first such oppressor and mentor
to those that have followed was Satan in the Garden of Eden. Some notable
followers would include the Pharaoh of Egypt, numerous Roman Emperors, Louis
XIV of France, Peter the Great, Joseph Stalin, and Adolph Hitler.
Sometimes it's not the individual tyrant but the system to which they are
beholden to. In America, for example, there have been a long string of wanna-be
oppressors in the past 100 years all obliged to the same corrupt
system. Individual presidents such as Richard Nixon, Bill Clinton, and George Bush stand out among those
who wish to dominate, control and exploit the citizens of America. While
they have not yielded the power individually like a Pharaoh or Hitler, they
have each acted to forward the cause of the ruling class to dominate, control
and exploit.
In 2005, Dr. Edwin Vieira wrote in,
"Don't Count on Washington to Protect us from Looming
Banking Crisis"...
Also not beyond the realm of possibility would be for the Establishment to trigger (or simply do nothing to prevent) the collapse of the monetary and banking systems in a full-blown depression, coupled with acts of aggression (so-called "preemptive strikes") by the General Government's armed forces overseas that ignite a world war. Properly managed, a depression and world war would result in massive redistribution of real wealth from common Americans to the Establishment and its clients, while the victims found themselves so severely regimented by the General Government's exercise of wartime "emergency" powers that they could not effectively complain. One need not be overly suspicious to suggest a sequence that history already partly bears out: World War I, the League of Nations, and the undermining of the international gold standard—followed by World War II, the United Nations, the adoption of Federal Reserve Notes as the world's reserve currency, and the "demonetization" of gold and silver as currencies—followed by World War III, a New World Order based on the tripartite division of the globe into European, American, and Asian blocs, and a supra-national world central bank emitting a world fiat currency.
Crony Capitalism
Over the past 100 years in America, we have seen political
cronyism spilling over into the business world creating self-serving friendships
and family ties between businessmen and the government that have influenced
the economy and society to the extent that it has corrupted public-serving
economic and political ideals.
Perhaps the most dramatic example would be the alliance between banking
trusts and the government in the late 19th and early 20th centuries,
shifting economic power from the government to private banks and creating
new buracracies to transfer the wealth of American citizens to the oligarchs
through an income tax.
Another well known example in the United States would be the Interstate
Commerce Commission, which was established in 1887 to regulate the railroad
"robber barons;" instead, it quickly became controlled by the railroads,
who set up a permit system that was used to deny access to new entrants
and functionally legalized price fixing.
Today, success in business depends on those close relationships between
businessmen and government officials and can be exhibited by favoritism
in the distribution of legal permits, government grants, special tax breaks,
government guarantees, and so forth.
For example, after the mad cow scare, Creekstone Farms decided to test all
its cows for mad cow disease. It built the proper facilities and hired the
personnel to make such a change only to have the U.S. Department of Agriculture
issue an injunction that refused to allow Creekstone to buy the kits necessary
to test. This allowed the larger beef producers to keep their costs low
and effectively block Creekstone from competing in the lucrative Japanese
export market.
In yet another example of the unholy alliance between government and the
private sector was the use of telecommunications companies by the government
to spy on American citizens. The government eavesdropped on American phone
and computer lines for almost six years after the Sept. 11 attacks without
permission from the Foreign Intelligence Surveillance Court, the special
panel established for that purpose under the 1978 law. After some 40 lawsuits
were filed against AT&T, Verizon Communications and other telecom firms
by groups and individuals who thought the Bush administration illegally
monitored their phone calls or e-mails, the U.S. Congress passed new surveillance
laws that effectively shielded telecommunications companies from lawsuits
arising from the government's terrorism-era warrantless eavesdropping on
phone and computer lines.
"He also forced everyone, small and great, rich and poor, free and slave, to receive a mark of his right hand or on his forehead, so that no one could buy or sell unless he had the mark..." - Revelation 13:16-17
Banks and Financial Institutions
Banks such as the Bank of America and CitiBank are relatively recent inventions.
There were no lending institutions or banks in the modern sense to be found
in ancient Israel. Commercial transactions and the lending of credit were
entirely in the hands of private individuals, landowners, and merchants.
Contemporary cultures in Mesopotamia lent money or produced at interest
(in some cases as much as 3313 percent per annum). The temptation among
the Israelites to do this was suppressed by laws forbidding the charging
of interest on loans (Ex. 22:25; Lev. 25:36-37; Ezek. 18:8). According to
these statutes, only foreigners could be charged interest on a debt (Deut.
23:20).
Pledges were sometimes required to guarantee a loan (Gen. 38:17), but essential
items, like a cloak, could not be kept past nightfall (Deut. 24:12; Amos
2:8). In periods of famine or high taxation a man might mortgage his home
and fields, pledging his labor as a debt-slave or the labor of his family
to satisfy the loan (Neh. 5:1-5; Ps. 119:11). Abuse of this system occurred
often enough that the prophets condemned it (Neh. 5:6-13; Ezek. 22:12),
Proverbs called it folly (17:18; 22:26).
The widespread introduction of coined money after 500 B.C. and the expansion
of travel and commerce in the Roman empire aided the establishment of banking
institutions in the New Testament period. Money lending was a common and
acceptable activity in the cities. Jesus’ parables of the talents (Matt.
25:14-30) and the pounds (Luke 19:11-27) lend credence to the practice of
giving sums to the bankers to invest or to draw interest. The older custom
of burying one’s money for safe keeping (Josh. 7:21) Jesus condemned
as “wicked and slothful” (Matt. 25:25-27).
The rich rule over the poor, and the borrower is servant
to the lender.
[Proverbs 22:7]
The banker, called a lender in Proverbs 22:7, suffered a poor reputation
among the Jews. Their religious law forbade the lending of money for interest.
In the New Testament, these bankers were the “money changers”
of the Temple.
Some of these money changers, taking advantage of the large number of currencies
in circulation in Palestine, set up some of the early banks. Farmers and
merchants came to them to weigh coinage and exchange it for the Tyrian drachma
favored in the city. The regulations regarding the Temple tax in Jerusalem
also worked in the financiers’ favor. The “moneychangers”
charged a fee of 12 grains of silver and set up their tables in the Court
of the Gentiles. They exchanged foreign currency for the silver didrachma
required by the law (Matt. 17:24). Jesus’ cleansing of the Temple may
have been in part a response to the unfair practices of these money-changers
(Matt. 21:12-13; Mark 11:15-17; John 2:14-16).
With sums coming into the Temple from Jews throughout the empire, the Temple itself became a bank, lending money to finance business, construction, and other programs. Pilate raised a storm of protest when he tapped one of the Temple funds, which was to be used exclusively for religious purposes, to build an aqueduct. After the destruction of the Temple in A.D. 70, the Roman emperor Vespasian ordered the continued payment of the tax and its deposit in the Temple of Jupiter.
The “harsh” master who expects interest and reaps what he did
not sow (Matt. 25:24, 26-27; Luke 19:21-23) is hardly to be taken as a model
for Christian business practice. Luke’s parable in particular contains
reminiscences of the hated Archelaus (Luke 19:12, 14; compare Matt. 2:22).
Jesus stood firmly in the Old Testament tradition when He commanded His
disciples to give freely to the needy who asked (Matt. 5:42; 10:8).
Some people feel compelled to defend the common, contemporary practice of
charging interest. Any moral decision on the matter must carefully weigh
rival claims: (1) that capital loaned at interest provides an opportunity
for persons to escape poverty and (2) that the inability of both individuals
and nations to pay interest on borrowed capital contributes to continued
poverty.
"Permit me to issue and control the money of a nation, and I care not who makes it's laws." - Mayer Anselm Rothschild
With the U.S. federal government now bought and paid for by an international
banking cartel, we have witnessed some of the largest transfers of wealth
from the middle class to the elite ruling upper class. Banks are institutions
of theft, as they practice "fractional reserve
lending". Paper money is theft; inflation is theft, and the income tax
is theft. Paper money prevents people from saving property (money) since
it is constantly losing value due to the theft of inflation. It is the primary
mechanism whereby wealth is stolen from poor people and given to the wealthiest
people of all: the ones who have the power to create money out of thin air,
and loan it back to the U.S. government (at interest), to enslave everyone
else.
The motive in loaning without interest to fellow Israelites was to prevent
the formation of a permanent underclass in Israel. Ezekiel regarded the
charging of interest as a watershed act separating the righteous from those
practicing abominations (Ezek. 18:8, 13, 17; 22:12). Nehemiah challenged
neglect of the Mosaic prohibition which had resulted in dire poverty for
some of the returned exiles (Neh. 5:6-13). Today, because of the unjust
banking system, we have a massive underclass of citizens enslaved to the
money masters. They own no real property... only debt in the form of paper
money and promises to pay. Their gold and silver have been taken from them
and given to the international banksters.
Big money lobbyists control most political leaders and stops the government
from regulating usurious interest rates or stopping the rape of poor neighborhoods
in which thousands of families are losing their homes through predatory
mortgage, home-improvement and foreclosure scams.
Take, for example, the "behind the scenes" negotiations that took place
between corrupted government officials and crony banks in creating new bankruptcy
laws making it harder for Americans to get a second chance and disqualfying
Hurrican Katrina victims from filing for relief. Critics note that the Bankruptcy
Abuse Prevention and Consumer Protection Act did nothing to curtail the
predatory practices of credit card companies, such as exorbitant interest
rates, rising and often hidden fees, and targeting minors and the recently
bankrupt for new cards. The bill's critics pointed out that these practices
are themselves significant contributors to the growth of consumer bankruptcies.
To his credit, Barack Obama voted against this measure.
Subprime Mortgage Crisis
In a subprime mortgage bubble created by the Federal
Reserve with easy cheap money, millions of Americans lost their homes
to the banking cartel in what is perhaps the greatest looting of the middle
class in the early 21st Century. From May 2000 to December 2001, the Federal
Reserve lowered the Federal funds rate 11 times, from 6.5% to 1.75%. The
crisis began with the bursting of the US housing bubble and high default
rates on "subprime" and adjustable rate mortgages (ARM). Once home prices
failed to go up as anticipated, refinancing became more difficult and defaults
and foreclosure activity increased dramatically as easy initial terms expired
and ARM interest rates reset higher.
You can't fully understand the current crisis without knowing about some of it's root causes:
The Community Reinvestment Act encouraged
lending to uncreditworthy consumers and later amendments to the CRA in the
mid-1990s, raised the amount of home loans to otherwise unqualified low-income
borrowers. Signed into law by President Jimmy Carter in 1977, it also allowed
for the first time the securitization of CRA-regulated loans containing
subprime mortgages. In Congressional debate on the Act, critics charged
that the law would "distort credit markets, create unnecessary regulatory
burden, lead to unsound lending, and cause the governmental agencies charged
with implementing the law to allocate credit."
Economist Stan Liebowitz wrote in the New York Post that a strengthening
of the CRA in the 1990s encouraged a loosening of lending standards throughout
the banking industry. In a commentary for CNN, Congressman Ron
Paul, who serves on the United States House Committee on Financial Services,
charged that the CRA with "forcing banks to lend to people who normally
would be rejected as bad credit risks." In a Wall Street Journal opinion
piece, Austrian school economist Russell Roberts wrote that the CRA subsidized
low-income housing by pressuring banks to serve poor borrowers and poor
regions of the country.
The Commodity Futures Modernization Act of 2000, cosponsored by Sen. Phil Gramm (now a vice-chairman of UBS Investment Bank and was John McCain’s presidential campaign co-chair and his most senior economic adviser from summer 2007 to July 18, 2008.) and signed into law by President Bill Clinton on Dec. 21, 2000. This legislation provided certainty that products offered by banking institutions would not be regulated as futures contracts, thus setting the stage for a massive concentration of financial power and setting up the investment dominos ready to tumble. One provision of the bill was referred to as the "Enron loophole" and is blamed for permitting the Enron scandal to occur. A "global financial supermarket" had been created and was a foundational cause of the 2008 financial meltdown.
Another piece of legislation spearheaded by Phil Gramm in efforts to pass banking reform laws, include the landmark Gramm-Leach-Bliley Financial Services Modernization Act in 1999, which served to reduce government regulations in existence since the Great Depression separating banking, insurance and brokerage activities. Under the FSMA new rules commercial banks, brokerage firms, hedge funds, institutional investors, pension funds and insurance companies could freely invest in each others businesses as well as fully consolidate their financial operations. For example, Citibank merged with Travelers Group, an insurance company, and in 1998 formed the conglomerate Citigroup, a corporation combining banking and insurance underwriting services. Other major mergers in the financial sector had already taken place such as the Smith-Barney, Shearson, Primerica and Travelers Insurance Corporation combination in the mid-1990s. This same legislation may have been pivotal in encouraging the corporate practices that led to the 2008 mortgage crises in America.
- During 2002, the annual home price in California, Florida, and most Northeastern states appreciated by 10% or more.
- Between 2004 and 2005, Arizona, California, Florida, Hawaii, and Nevada had record price increases in excess of 25% per year.
- The bubble began to burst in 2005 when the booming housing market halted abruptly for many parts of the U.S. in late summer of 2005 and throughout 2006 continued to slowddown. Prices were flat, home sales fell, resulting in inventory buildup.
- In 2007, home sales continued to fall the steepest since 1989 and the subprime mortgage industry begins to collapse.
- Between February and March, 2007, more than 25 subprime lenders declared bankruptcy, announced significant losses, or put themselves up for sale.
- On April 2, 2007, the largest U.S. subprime lender, New Century Financial, files for chapter 11 bankruptcy.
- On 19 July 2007, the Dow Jones Industrial Average hit a record high, closing above 14,000 for the first time, and by 15 August, the Dow had dropped below 13,000 and the S&P 500 had crossed into negative territory year-to-date. The crisis caused panic in financial markets and encouraged investors to take their money out of risky mortgage bonds and shaky equities and put it into commodities as "stores of value".
- American Home Mortgage files for chapter 11 bankruptcy on August 6.
- On August 16th., Countrywide Financial Corporation, the biggest U.S. mortgage lender, narrowly avoids bankruptcy by taking out an emergency loan of $11 billion from a group of banks.
- By August 31st., Ameriquest, once the largest subprime lender in the U.S., goes out of business.
- On September 30th., Internet banking pioneer NetBank goes bankrupt, and the Swiss bank UBS announced that it lost US$690 million in the third quarter.
- In October, a consortium of U.S. banks backed by the U.S. government announced a "super fund" of $100 billion to purchase mortgage-backed securities whose mark-to-market value plummeted in the subprime collapse.
- By Nov, 2007, the CEOs of Merrill Lynch and Citigroup were forced to resign within a week of each other.
- On November 1st., the Federal Reserve injects $41B into the money supply for banks to borrow at a low rate. The largest single expansion by the Fed since $50.35B on September 19, 2001.
- IndyMac was shut down by the FDIC on July 11, 2008.
- In March 2008, the Bear Stearns Companies, Inc., one of the largest global investment banks and securities trading and brokerage firms was given an emergency loan by the Federal Reserve to try to avert a sudden collapse of the company. The company could not be saved, however, and was sold to JPMorgan Chase. As of November 30, 2007 Bear Stearns had notional contract amounts of approximately $13.40 trillion in derivative financial instruments, of which $1.85 trillion were listed futures and option contracts.
- On Sept. 7, 2008, Fannie Mae and Freddie Mac were taken over by the federal government.
- On Sept.14, 2008, the investment bank Lehman Brothers declared bankruptcy, while Merrill Lynch was joined with Bank of America in a forced merger worth $50 billion.
- On Sept. 16, 2008, Trilateral Commission member, American International Group (AIG) got $85 Billion handed to them by the Federal Reserve in exchange for an 80% stake, yet people can't get help with keeping their homes. AIG CEO Martin Sullivan made $68 million in one year. Jim Rogers, CEO of Rogers Holdings said, "they have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents. I'm not quite sure why I or anybody else should be paying for this."
- On September 19, 2008, a plan intended to improve the difficulties caused by the subprime mortgage crisis was proposed by the Secretary of the Treasury, Henry Paulson. He proposed a Troubled Assets Relief Program, later incorporated into the Emergency Economic Stabilization Act, which would permit for the United States government to purchase illiquid assets, also termed toxic assets, from financial institutions. Henry Paulson, Secretary of the Treasury and President Bush announced a proposal for the federal government to buy up to US$700 billion of illiquid mortgage backed securities with the intent to increase the liquidity of the secondary mortgage markets and reduce potential losses encountered by financial institutions owning the securities.
- On September 21, the two remaining investment banks, Goldman Sachs and Morgan Stanley, with the approval of the Federal Reserve, converted to bank holding companies.
- On September 25, Washington Mutual, the nation's largest savings and loan, was seized by the Federal Deposit Insurance Corporation and most of its assets transferred to JPMorgan Chase.
- It was reported on September 29, that Wachovia, the 4th largest bank in the United States, would be acquired by Citigroup. Later, Wachovia rejected the previous offer from Citigroup in favor of acquisition by Wells Fargo.
- On September 29, the U.S. Federal Reserve announced plans to double its Term Auction Facility to $300 billion. Because there appeared to be a shortage of U.S. dollars in Europe at that time, the Federal Reserve also announced it would increase its swap facilities with foreign central banks from $290 billion to $620 billion.
- On October 1, the United States Congress passed a $700 billion bailout plan, Emergency Economic Stabilization Act of 2008, to expand bank deposit guarantees to $250,000 and to include $100 billion in tax breaks for businesses and alternative energy, despite a widespread public outcry to not pass it. President Bush signed the bill into law within hours of its enactment, creating a $700 billion Troubled Assets Relief Program to purchase failing bank assets
- On October 8, the European Central Bank, Bank of England, Federal Reserve, Bank of Canada, Swedish Riksbank and Swiss National Bank all announced simultaneous cuts of 0.5% to their base rates, and shortly afterwards, the Central Bank of the People's Republic of China also cut interest rates.
- Also on October 8, the Federal Reserve loaned AIG $37.8 billion, in addition to the previous loan of $85 billion.
- On October 10, the government of the United States, as authorized by the Emergency Economic Stabilization Act, announced plans to infuse funds into banks by purchasing equity interests in them, in effect, partial nationalization, as done in Britain. The bonds of the bankrupt Lehman Brothers were also auctioned off, selling for a little over 8 cents on the dollar.
- On October 11, the United States government announced a change in emphasis in its rescue efforts from buying illiquid assets to recapitalizing banks, including strong banks, in exchange for preferred equity; and purchase of mortgages by Fannie Mae and Freddie Mac.
- On October 14, the United States announced a plan to take an equity interest of $250 billion in US banks with 25 billion going to each of the four largest banks. The 9 largest banks in the US: Goldman Sachs, Morgan Stanley, J.P. Morgan, Bank of America, Merrill Lynch, Citigroup, Wells Fargo, Bank of New York Mellon and State Street were called in to a meeting on Monday morning and pressured to sign.
- On November 10, the US Treasury announced investment of another 40 billion dollars in preferred stock of AIG, adjusting the terms of the existing credit line and its amount. Total exposure, including equity and debt, is now 150 billion dollars.
- On November 12, US Treasury Secretary Henry Paulson scrapped the original Troubled Asset Relief Program (TARP) and announced shift in the focus to consumer lending. The remaining portion of the TARP budget will be used to help relieve pressure on consumer credits such as car loans, student loans, credit cards etc.
- As of the week of November 16 stock losses in United States markets during 2008 as measured by the S&P 500 were equivalent to those suffered in 1931, over 50%.
- On November 23, a rescue plan for Citigroup was agreed by the United States government. In a joint statement by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp it was announced that in exchange for preferred stock valued at 27 billon dollars paying 8% interest a further $20 billion would be invested into the company and that the government would limit loss on $306 billion in risky loans and securities to 29 billion dollars plus 10% of any remaining losses.
- The total cost of funds committed to the bailout in its various guises
has now hit $8.5 trillion dollars, an amount
that represents 60 per cent of the U.S. gross domestic product. Millions
of Americans with savings accounts and pensions will ultimately pay the
price because, as the San Francisco Chronicle admits, “The Fed lends
money from its own balance sheet or by essentially creating new money.”
“If you print money all the time, the money becomes worth less,”
warns Diane Lim Rogers, chief economist with the Concord Coalition. Veteran
investor Jim Rogers echoed the sentiment, predicting the dollar is “going
to lose its status as the world’s reserve currency,” adding,
“It will be devalued and it will go down a lot. These guys in Washington,
they want to debase the currency.”
How long will it be before Americans realize the looming specter of hyperinflation spells disaster for their life savings? How long will it be before we see rioting in the streets on a par with the scenes witnessed in Iceland recently, where the Icelandic krona has lost half its value in a matter of weeks? Meanwhile, over in the UK, the government assured the vast majority of the population that they will “tax the rich” in order to pay for the bailout on the other side of the Atlantic, with whopping 61 per cent tax bands being levied on those earning over £100,000 a year.
The mortgage lenders that retained credit risk (the risk of payment default) were the first to be affected, as borrowers became unable or unwilling to make payments. Major banks and other financial institutions around the world have reported losses of approximately U.S. $435 billion as of 17 July 2008. Owing to a form of financial engineering called securitization (a structured finance process in which assets, receivables or financial instruments are acquired, classified into pools, and offered as collateral for third-party investment), many mortgage lenders had passed the rights to the mortgage payments and related credit/default risk to third-party investors via mortgage-backed securities (MBS) and collateralized debt obligations (CDO). Corporate, individual and institutional investors holding MBS or CDO faced significant losses, as the value of the underlying mortgage assets declined.
In a classic pyramid scheme style, by buying mortgages and repackaging
the loans for resale via mortgage-backed securities, Fannie Mae and Freddie
Mac provide banks and other financial institutions with fresh money to make
new loans. Income is generated for Fannie Mae through the positive interest
rate spread between the rate paid to fund the purchase of mortgage investments
and the return it earns on those retained mortgage investments in the derivatives
market. Fannie Mae expanded to also buy mortgage bonds or loans outright
using borrowed money, and make money based on the difference between interest
it receives from the bonds and what it has to pay on its borrowings. Fannie
Mae also earns a significant portion of its income from guaranty fees it
receives as compensation for assuming the credit risk on the mortgage loans
underlying its portfolio.
The Federal National Mortgage Association (FNMA), commonly known as Fannie
Mae, was founded as a government sponsored enterprise (GSE) in 1938
as part of Franklin Delano Roosevelt's New Deal to provide liquidity to
the mortgage market. In 1968, to remove the activity of Fannie Mae from
the annual balance sheet of the federal budget, it was converted into a
stockholder-owned corporation authorized to make loans and loan guarantees.
Fannie Mae is the leading participant in the U.S. secondary mortgage market,
which serves to provide liquidity to the primary mortgage market to ensure
that mortgage companies, savings and loans, commercial banks, credit unions,
and state and local housing finance agencies have enough funds to lend to
home buyers. As of 2008, Fannie Mae and the Federal Home Loan Mortgage Corporation
(Freddie Mac) own or guarantee about half of the U.S.'s $12 trillion mortgage
market.
It's here in the Shadow Financial Markets of derivatives where Bear Stearns,
Fannie Mae, Freddie Mac, and others got in to financial trouble. Derivatives
such as interest rate swaps and options to enter interest rate swaps ("pay-fixed
swaps", "receive-fixed swaps", "basis swaps", "interest rate caps and swaptions",
"forward starting swaps") are used to "hedge" cash flow.
To better understand how this confusing economy works, listen to Law professor Michael Greenberger explain
the sub-prime mortgage crisis, credit defaults, the shaky future of other
types of loans and what we can expect from the U.S. financial markets.
Derivatives are used by investors in any particular industry and speculators
as hedges against problem with their investments, or just to make money.
It’s like an insurance policy for certain types of upsets in any industry.
It’s one of the reasons why the worlds economy is falling apart now,
because the derivatives market is unregulated because it’s so complicated
the government doesn’t know how to look into how it is being used to
build pyramid money making schemes by all of our major and minor financial
institutions.
What they do is borrow discounted money from the federal government, then
turn around and sell it to us for a profit as loans or credit. But once
they have our name on the dotted line, they don’t have to wait for
us to pay them back. They simply turn around and use what we owe them as
credit to get more money using derivatives to secure what they owe on it
in case we don’t pay them back. And they just keep doing it and over
and over lending out money that doesn’t represent the amount of product
and services available in the economy so we import goods and services using
credit that’s supposed to represent what our economy is worth but actually
represents what we owe foreign countries in the future, which if they keep
doing this, we will never catch up with what we owe sinking further and
further into debt, which has now caught up with us and our economy is crashing.
So as their pockets get lined with money, the value of the dollar goes down
while the price of everything we import goes up and other countries can
better afford to buy what we produce than we can so we’re exporting
products that we need here in our domestic economy. They borrow millions
of dollars turning it into a hundreds of millions before we’ve made
any payments on the money they lend us. And they’re also lending money
to themselves investing it on Wall Street to make more money covering their
investments from their house of cards portfolios with derivatives, not to
create competition in the market place but using multi levels of their fabricated
money scams to cover the money they owe back to the federal reserve.
What they’ve done has basically had the same effect as counterfeiters
putting trillions of dollars of worthless money into our economy only worse
because it was done with the support of our lawmakers and central financial
institutions. So now the people that ripped us off are the same ones we
have to look to fix what they broke, which wasn’t an accident. It was
a bank robbery by the owners of the bank, a most heinous and ludicrous crime.
Credit Default
Swap | Hedge Funds
The Treasury Department and the Federal Reserve took steps in 2008 to bolster confidence in Fannie Mae and Freddie Mac, including granting both corporations access to Federal Reserve low-interest loans (at similar rates as commercial banks) and removing the prohibition on the Treasury Department to purchase the GSEs' stock. On July 30, 2008, President Bush signed the Housing and Economic Recovery Act of 2008, intended to restore confidence in Fannie Mae and Freddie Mac by strengthening regulations and injecting capital into the two large U.S. suppliers of mortgage funding. On Sept.5, 2008, the Treasury Department placed both Fannie Mae and Freddie Mac into conservatorship and took over management of the pair.
Too Big to Fail
A new Orwellian phrase came on the scene that said these institutions are
"too big to fail." While there may be some economic truth behind that statement,
the behind the scenes dimension that is not newsworthy enough for the corporate
bought mainstream media is how corrupt politicians were protecting their
crony buddies in these institutions. Clinton cronies, James Johnson and
Franklin Raines, ran Fannie Mae leading up to the current crisis.
- Franklin Raines is the former chairman and chief executive officer of Fannie Mae who served as White House budget director under President Bill Clinton. He is currently employed by Barack Obama's Presidential Campaign as an economic adviser. In 2003 alone, Raines's compensation was over $20 million.
- From 1991 to 1998, James Johnson served as chairman and chief executive officer of Fannie Mae, and was previously vice chairman of Fannie Mae (1990-1991) and a managing director with Lehman Brothers (1985-1990). He was the campaign manager for Walter Mondale's failed 1984 presidential bid and chaired the vice presidential selection committee for the presidential campaign of John Kerry. He was involved in the vice-presidential selection process for the 2008 Democratic presidential nominee Senator Barack Obama, and is currently an economic adviser to Obama's campaign. Johnson is also a member of the the American Friends of Bilderberg, the Council on Foreign Relations, and the Trilateral Commission.
Fannie and Freddie is the number one contributor to Senator Chris Dodd
between 1989 and 2008. The number two recipient of campaign funds from Fannie
and Freddie is Barack Obama. Further down the list of contributions from
Fannie and Freddie, John McCain received about $21,000.
President Obama and the federal government doesn't talk about what is really
going on and don't seem interested in protecting the real victims in this
scandal - the people losing their homes in foreclosure and bankruptcy. Rather,
they are protecting their crony CEO's of these financial institutions while
transferring the wealth of the middle class to the ruling international
banksters. And, as if to rub salt into the gaping American wound, the American
taxpayer is expected to pay for the bailouts of these criminal enterprises.
Why is it so hard to figure out what's going on in commodities
markets -- oil specifically?
Well, the reason it's hard to figure out is about 30 percent of our crude
oil energy futures are traded in what is called a dark market -- that is
a market that was deregulated in December of 2000 at the behest of Enron.
Prior to that legislation being passed, all energy futures traded in the
United States or affecting the United States in a significant fashion were
regulated by United States regulators under a very careful regime that had
been perfected over about 78 years and many observers believe that because
those markets are not being policed, malpractices are being committed and
traders are able to boost the price virtually at their will.
Listen to Michael Greenberger as he discusses Deflating the oil bubble
Credit Card Debt
Credit card debt has soared in recent years, particularly among young people. In 2004, the average credit-card debt of US households was $9,300, up from $2,966 in 1990, according to research firm CardWeb.com - - that's 214% more debt. The major credit card companies target a younger audience, in particular college students, many of whom are already in debt with college tuition fees and college loans and who typically are less experienced at managing their own finances. A recent study by United College Marketing Services has shown that student credit lines have increased to over $6,000. Credit card usage has tripled since 2001 amongst teenagers as well. The 2006 documentary film titled Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders chronicles the abusive practices in the credit card industry while showing how banks and other creditors deliberately market to people who are more likely to have problems paying.
Because the fees banks charge it's credit card customers make up such a
huge part of their profits, Providian, Bank One, Chase, and Citibank have
all been found to "roll back" posting times to extract more late fees. The
due dates were "rolled back" from 1pm to 10am because mail was delivered
in the afternoon so due dates were actually rolled back to charge more late
fees.
Universal default is another corrupt feature of many North American credit
card contracts. When a cardholder is late paying a particular credit card
issuer, not only can that card's interest rate can be raised, but universal
default allows other card issuers to increase rates on their cards as well.
Being late on one credit card will potentially affect all your credit cards.
(Citibank voluntarily stopped this practice in March 2007 and Chase stopped
the practice in November 2007.) Some of the nation's influential top credit
card issuers, who are among the top fifty corporate contributors to political
campaigns, have successfully opposed Congressional regulations outlawing
the practice.
Secret History of the Credit Card
"What's in Your Wallet?"
In 1958, Bank of America launched its BankAmericard
credit card and in 1965 began subscribing licensing agreements with other
banks. In 1967, Master Charge was licensed by United California Bank (subsequently
merged into Wells Fargo), and the Bank of California (subsequently merged
into the Union Bank of California) as a competitor to the BankAmericard.
With the help of New York's Marine Midland Bank, now HSBC Bank USA, these
banks joined with the Interbank Card Association (ICA) to create "Master
Charge: The Interbank Card".
Bank of America gave up control of the BankAmericard program in 1970 when
various BankAmericard issuer banks took control of the program, creating
National BankAmericard Inc. (NBI), an independent non-stock corporation
which would be in charge of managing, promoting and developing the BankAmericard
system within the United States.
By 1972, BankAmericard had spread to 15 countries, and in1974, IBANCO, a
multinational member corporation, was founded to manage the international
BankAmericard program. In 1976, the directors of IBANCO determined that
bringing the various international networks together into a single network
with a single name internationally would be in the best interests of the
corporation; however in many countries, there was still reluctance to issue
a card associated with Bank of America. For this reason, in 1977 BankAmericard,
Chargex, Barclaycard, Carte Bleue, and all other licensees united under
the new name, "Visa", which retained the distinctive blue, white and gold
flag. NBI became Visa U.S.A., and IBANCO became Visa International. In 1979,
"Master Charge: The Interbank Card" was renamed simply "MasterCard".
Credit cards are very profitable for banks. Critical to the success of these
charge cards has been universal acceptance by merchants and influential
advertising to consumers to use them instead of cash. MasterCard's current
"Priceless" advertising campaign, furst run in 1997, is "There are some
things money can't buy. For everything else, there's MasterCard."
Corrupt Banking System
This highly informative and easy to understand film covers just about everything
that isn't taught in school regarding the corrupt banking system. It explains
how these institutions get away with robbing the unsuspecting public by
creating monetary policies designed to enslave society, while keeping the
system in a perpetual state of rising debt.
- Cartels Robbing the Public
- How "Money" is Created
- Money is Debt
- Monetary Reform
- Warning About the NWO
- Money as Debt website
Declaration of Independence
The Preamble of the United States Declaration of Independence says,
We hold these truths to be self-evident, that all men are created equal,
that they are endowed by their Creator with certain unalienable Rights,
that among these are Life, Liberty and the pursuit of Happiness.
That to secure these rights, Governments are instituted among Men, deriving
their just powers from the consent of the governed, That whenever any Form
of Government becomes destructive of these ends, it is the Right of the
People to alter or to abolish it, and to institute new Government, laying
its foundation on such principles and organizing its powers in such form,
as to them shall seem most likely to effect their Safety and Happiness.
Prudence, indeed, will dictate that Governments long established should
not be changed for light and transient causes; and accordingly all experience
hath shewn, that mankind are more disposed to suffer, while evils are sufferable,
than to right themselves by abolishing the forms to which they are accustomed.
But when a long train of abuses and usurpations, pursuing invariably
the same Object evinces a design to reduce them under absolute Despotism,
it is their right, it is their duty, to throw off such Government, and to
provide new Guards for their future security.
