Monday, April 21, 2008

The Ultimate Bailout

The Ultimate Bailout

“Who will bail out the Fed? In reality, we already know the answer to this. It lies in the record high gasoline prices, record high food prices, and either record or near-record prices in almost everything else. You and I will bail out the Fed. Not with money, but by a loss in our standard of living caused by the debasement of our money which is necessary to perpetuate the status quo and bail out a woefully ill financial sector. Many months ago, I forecasted that we would see a brief period where deflationary forces would tug at our economy, and the powers that be would respond with massive infusions of liquidity. In my opinion, we have reached that inflection point. For a year we have seen credit destruction as loans have gone bad, resulting in massive losses. The response, while slow at first has been decisive as of late. M3 growth statistics collected by various interested parties support this thesis. The monetary base is growing at a record pace: over 17% y/y as of last week. That growth in turn will fuel consumer price inflation moving forward at an ever-accelerating rate regardless of what the irrelevant CPI states. Despite many perceptions to the contrary, the events in the financial and banking system affect each and every one of us, regardless of whether or not we own stock, have a mortgage or carry a credit card balance. We all have one thing in common: we use the Dollar as our unit of exchange, and that alone means that we have been, are, and will continue to be affected by the ultimate bailout.” Andy Sutton, My2CentsOnline.com | April 18, 2008 http://www.my2centsonline.com/
The powers that be have instituted another in a long series of fraudulent con games and Ponzi scams on the people. This time they are telling us everything is under control as they futilely attempt to stem the massive hemorrhaging of the US economy while ignoring the cancers of greed corruption that are spreading throughout financial system, taking a deadly toll on the whole system. The Federal Reserve Bank, which is not a part of the US government but is really a consortium of privately owned banks the US Congress gave permission to set US monetary, credit and interest policies; is feverishly trying to save the Wall Street banks and shadow banking system (hedge funds, derivatives and other exotic debt leveraging programs). Unfortunately they are doing it at the expense of the US dollar, our lifestyles and our rapidly sinking standard of living. What the Fed is robbing Peter to pay Paul. The Fed in collusion with the White House, Wall Street, the mortgage companies, bond rating services, mortgage brokers, insurance companies and the media duped AmeriKKKa into going for the lamest okey-doke imaginable; a “greed is good” philosophy infused into the quest for the ever elusive “AmeriKKKan dream”. This incessant propaganda prompted all types of ordinary folks to go into debt as countless predatory lenders gleefully issued the unsuspecting “marks” loans because of the higher commission they received as an incentive inflated the housing and credit bubbles beyond their capacity for repayment. Now in order to save their partners in crime, the Fed is dumping even more money into circulation while manipulating the monetary supply and interest rates to facilitate the bail out the Wall Street banking houses that helped the Fed create the financial collapse in the first place.
While Wall Street, at the urging of the Fed, was touting the benefits of greed and promoting going into debt as a way to boost the US economy, the inevitable day of reckoning kept getting closer and closer. But the plutocracy kept the con game going by keeping us oblivious to the inevitable Karma their behaviors created. What goes around comes around. Now the Fed is desperately trying to cover its’ tracks and bail out their co-conspirators on Wall Street. But since the Fed is injecting “liquidity” (digitally created money out of thin air) into both the economy and into the traditional and shadow banking systems, our costs of living are skyrocketing due to the devaluation of the US dollar. This is monetary inflation, the rise in the cost of living due to massive infusion of dollars into the economy, devaluing the dollar, causing everything, and I mean everything to cost more.
This means folks struggling to make ends meet are finding the ends moving farther and farther apart. What the bail outs mean is the bankers who caused this problem are being given a free pass, a do not go to jail card from the Fed and the US Congress. The Fed and Congress are helpless to prevent the bottom from falling out of the economy. This is their goal. At the same time, they surely don’t want the somnambulant AmeriKKKan people to wake up and get hip to the game being run on them. They use the corporate media to keep the people distracted and our attention diverted from the tidal wave of wealth redistribution that is about to engulf us. There are a few media outlets providing analysis of the situation. “JIM: ... The bailouts would be paid for by tax increases coming next year and we’ll get into that, the tax increases that are coming, probably the largest tax increase in US history because you can’t bailout 3- or 400 people, create tax credits for the builders, tax credits for investors, that money has to be paid by somebody. And what’s going to happen is they’re going to have to raise taxes. In other words, you and I as American taxpayers are going to pay for this. But you’re right, John, because the Barney Frank program, which is very similar to Senator Dodd’s the government would guarantee 3 to 400 billion and what would happen is the government would come in and underwrite a new mortgage based on the new value of the home. Let’s say that the house was formerly selling at 130,000; now the house has fallen by 30% - the new value of the house is 100,000. So what would happen is the lender would have to write the mortgage down, the government would come in and give a loan for almost 90% of the value of the home, and the lender would get 85% of the mortgage and then the government would get to pocket 5% of the mortgage. So you’re absolutely right. Now you have the government getting into the housing industry where the government has a stake in these mortgages so they own part of your home. So in effect, now in addition to paying income taxes you would also be paying interest payments to the government in many ways. So the government has a 5% equity interest in your home, so we’re definitely moving into new territory regarding property rights because what the government is trying to do through the bully pulpit is to convince lenders, “look, property prices are falling, wouldn’t it be better to renegotiate than for you to put this into foreclosure.” But we’re moving into major property rights territory here in that we’re making property rights in this country less secure because if we set this precedent in this bubble, what do we do in the next bubble? What if it’s – who knows? – let’s bail out big investors in the stock market, hedge funds and things like that. So let’s see what happens there.
JOHN: But more noticeably, if you see this transfer process going on, it takes money from one group of people to now ownership on the part of the Fed government supporting another group of people. And so what we’re doing is they’re actually taking somebody else’s money to buy property for themselves – the government is. That’s what is effectively happening here.
JIM: Yeah, so we’re getting into a very, very risky situation here regarding property rights. And as many have pointed out, this is also going to impact future lending practices because if you are a lender loaning on a piece of property, remember, there was also a proposal here – now, so far they’ve booted it out in terms of the negotiations between both sides of the aisle, but they wanted to allow judges to determine what your new mortgage and interest rate is. So imagine what a lender would do if you get to a situation where a lender may not be secure on the loan. In other words, I make a loan today at x dollars and I’m charging a 6% interest rate, but arbitrarily some time in the future I could have this interest rate reneged on and I might be forced to take all these losses on properties. So like I said, we’re entering into brave new territory when it comes to property rights.” Transcript from, Bailouts, Stimulus II & Other Interventions http://www.financialsense.com/fsn/BP/2008/0412.html#bailouts
The real crime is the bankers and con men who created this mess get off Scott free while you and I get engulfed by a tidal wave of money and credit infused by the Fed into the economy making conditions worse for us. To add insult to injury the “bailout” plans being bantered around actually are scams whereby either the government or the lenders will end up owning the people’s homes and assets. This is the ultimate plan of the ruling elites, to reduce the people to poverty, debt serfdom and wage and tax servitude. Their goal is to rob us all through predatory lending, increased taxation and outright fraud. Their goal is to transfer the wealth to the elites, a reverse Robin Hood, rob the poor and give it to the rich. “It is crucial to understand that the current economic meltdown is a transfer of wealth from the middle and lower classes to the ruling elite. Wealth transfers do not just happen, nor are they the products of incompetency. They are intentional and well-planned. Central to wealth transfer is corruption at the highest levels of the economic and political systems. In hindsight, we look back upon the Savings and Loan debacle of the 1980s, at that time, the largest theft in the history of the world, yet today, our minds cannot begin to wrap around the wealth that has been stolen from the American people, making the S&L scam look like piggy bank pilfering--and to my knowledge, Catherine Austin Fitts at her Solari and Dunwalke sites, is the only person to have documented this so impeccably.” The Joyride That Was The American Empire By Carolyn Baker www.informationclearinghouse.info/article18169.htm
Wake up and smell the stench of the decaying carcass of the AmeriKKKan economic system. What goes around comes around. The inevitable consequences of widespread fraud, systemic corruption, wanton callousness, ignorance and apathy are now staring us in the face.

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