Ms. Yellen: How About Quantitative Easing For The People?

The Federal Reserve: The Biggest Scam In History
The Federal Reserve: The Biggest Scam In History (Photo credit: CityGypsy11)

Posted December 30, 2013

by Jerry Alatalo

Economics is a field that many find very confusing – myself included. Professor Steve Keen, who lectured at the University of West Sydney, Australia, considers himself from the economic school of Modern Monetary Theory (MMT). Let me say first that I haven’t spent much time (yet) researching MMT, but with the few MMT economists I have listened to in interviews, speeches, etc., I have come to agree with their ideas. With regard to Professor Keen, in a separate interview he mentioned his wish that Professor Bill Black had been in charge of investigation and prosecution of financial crimes in the 2007-present crisis – instead of the 1980’s Savings and Loan scandals where Mr. Black was one of the lead investigators.

For the sole reason that he admires Bill Black, Professor Keen from that point became one of my favorite economists and a man who I will spend a lot of time listening to. Mr. Keen’s view is that it is private debt, not public debt, that is the real problem in the USA, Europe, and other nations. Private debt includes mortgages, credit cards, student loans, and transactions of the so-called shadow banking system – financial corporations not subject to regulations like traditional banks. You will understand the shadow banking system is running wild when you understand the supposedly “regulated” banks have run virtually wild since repeal of the Glass-Steagall Act in 1999.

The Federal Reserve began quantitative easing (QE) in the fourth quarter of 2008, with a philosophy that Wall Street (WS) was on fire and no longer lending to businesses and citizens. The result of QE, with $85 billion per month of purchases of mortgage-backed securities and Treasury bonds, has been a stabilizing of WS banks – without any helping of the American people. The stock exchange has broken records, however this has no relation to the economic conditions experienced on the ground by the citizens, as unemployment, foreclosures, poverty, etc. continue at very high levels.

The Federal Reserve has in effect doubled-down on policies that created the crisis in the first place, while credit lending remains almost non-existent – QE being like a Band-Aid on a hemorrhage – without any falsely advocated trickle down effects. QE has not been a solution in the least, and has to be seen as a problem. The Fed has increased the size of its balance sheet five times, from $800 billion to $4 trillion, roughly $1.25 trillion being mortgage-backed securities.

These mortgage securities are the complex financial instruments in which the financial industry bundled so-called toxic assets, subprime mortgages which will probably default, many of them so-called “liars” loans, where millions of people who should never have received a home loan got them through fraudulent, criminal actions by lenders across the nation. False incomes, false appraisals, and other frauds were perpetrated to get as many deals as possible done, with bonus incentives pushing the practice to historic criminal levels.

These liars and “ninja” (no income, no job, no assets) mortgage loans were then bundled into derivatives and other complex financial instruments, fraudulently classified “AAA” by the largest ratings agencies, and sold to unwary, unsophisticated customers around the world. These are what are termed “toxic assets”, and this is what the Fed has purchased over $1.25 trillion of since 2008. These are assets which the fraudsters in the too-big-to-fail banks were unable to fraudulently sell to pension fund managers, city, county, state governments, and other institutional investors. In effect the Fed has been like a “fence” for the banks, buying stolen homes. Stolen because these homes became owned by the banks through fractional reserve lending – creating money out of thin air – through a few keystrokes on their computer screens.

Imagine you stole all of your neighbors’ boats, then your local bank paid you for all of them.

Professor Keen has suggested that QE, instead of going to banks in a backdoor bailout, go to the citizens. If his suggestion had been agreed upon since the 4th quarter of 2008, then $3.2 trillion would have gone into the hands of United States citizens, with an additional $75 billion per month now that the Fed stepped down from $85 billion/month in QE. Professor Keen points out that his plan would require that Americans must use the money to pay down debt. This would result in more spending in the economy as people would have less to pay on debt service, more hiring, more taxes, etc.

Mr. Keen’s idea is creative, makes sense, and needs to be very seriously considered. The American citizens have suffered damage through the massive fraudulent actions which took place in the years leading up to the economic crisis of 2007-8. Because there are trillions of dollars worth of toxic assets/mortgage-backed derivatives purchased by those who were falsely led to believe were “AAA” (safe) investments, recovery for pension plans, governments, and others who bought them is next to impossible. 

Instead of continuing to purchase these toxic assets from criminal banks – buying stolen property – direct those resources to the people, who have become the victims of the criminals who committed them. 

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(Thank to The BigPicture RT @ YouTube)

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Wall Street Predators And Con Men… Or Public Banking?

Seal of the United States Federal Reserve Syst...
Seal of the United States Federal Reserve System. The seal has most of the elements of the Board of Governors seal. A version is printed on all U.S. Federal Reserve Notes redesigned since 1996 (replacing the letter of the bank which printed the note, which was used in earlier designs). (Photo credit: Wikipedia)

Posted October 25, 2013

by Jerry Alatalo

Jekyll Island, The Federal Reserve Act of 1913, J. P. Morgan, the Rockefellers, the Rothschilds, Warburgs, Lazards, Schiffs, Lehmans, Goldman Sachs, privately-owned international central bank cartels, boom and bust, fractional reserve counterfeiting, etc., etc., etc. Deregulation, Glass-Steagall repeal, offshoring of jobs, Wall Street casino, insider trading, Brooksley Born, Greenspan, Summers, Bernanke, fraudulent derivatives, too-big-too-fail/jail, world economic crisis 2008-present, Arab Spring/Occupy, bail-outs/bail-ins, austerity, protest, unemployment, suicide, foreclosure, sequester.

You know, the history of the world from 1913 when the Federal Reserve System became a reality to the present, which leads you to deliver a series of primal screams into your pillow. Ahhh… Didn’t those screams into your pillow make you feel better?

Alrighty then…

Perhaps the first question which needs attention is “what does it say about the present economic conditions on the Earth, that it leads me to scream in my pillow?” It should come as no surprise that I would answer that question by saying fundamental change, big change, in the financial/monetary system of the world is in order.

The essential reason that big change must come is that there are too many people around the world who are getting hurt by the present setup. To boil the world’s economic condition down, in the past several centuries humanity has created a money system which has concentrated wealth into the hands of a few while the rest of humanity has seen their wealth distributed up: a trickle-up economy.

As a result of humanity’s going along with a situation where the most wealthy banking families on Earth have gained control of the quantities and creation of money, the transfers of tremendous amounts of money have occurred from the 99.9% to the .1% – the owners of the largest banks in the world. It is time for this unequal distribution of wealth to become reversed. It is time for humanity to begin the new chapter.

If one thinks about these things one can come to conclude that man created the present world situation, so man can create a new world situation. As far as this writer can see, the greatest tool to create an entirely new world financial system, one that is more equitable, just, and fair – that eliminates the frauds, cons, and criminality of Wall Street – is public banking.

Did I mention that public banking is the solution?

Let me sincerely apologize for that smart-ass remark. It is evidence of impatience and frustration that this entirely practical economic/financial solution hasn’t already been implemented worldwide.

It is a mistake to inject humor into a discussion that is in reality about life and death issues. I do regret doing so as it is an allowing of ego to enter an effort to diminish real human suffering experienced in many countries and regions around the Earth. Once again, please forgive me. Many of you are fellow bloggers, so you understand the concept of crafting words for maximum communication, and that it is at times very challenging. You have ideas and thoughts which you believe, if shared with others, will result in an improvement in the lives of your fellow brothers and sisters in the family of man.

Public banking is a concept that many people are coming to an awareness of, I suppose because it is an idea whose time has arrived. Sitting here in a room in Michigan on Lake Superior in the U.S.A. writing about public banking may in fact push the ball a little. Perhaps a few readers will “get it” and go on to spend a little or great amount of time researching then conveying to others what they have learned. This is the magnificent thing about the internet: ideas become shared and distributed, solution(s) get discussed, studied, and disseminated to the ends of the Earth.

Let me take a moment to try and bolster the spirits of fellow bloggers. There are times when you lose confidence that your writings, though excellent, are making any difference whatsoever. You look out at the world, seeing in your mind’s eye locations in cities, nations, regions, and continents, and come to the view that nothing much is different – that your efforts, as well as the efforts of millions – aren’t even making a dent.

Let us be encouraged and renewed, because good communications are creating the difference.

If one thinks about earlier generations of humanity, those ancestors were creating conditions on Earth during their lifetimes. In that regard nothing has changed – this generation is creating conditions on Earth as well – ideally with a focus on leaving the planet in better shape for all generations to come. Humanity is all about continuous evolution and change. Quite frankly it is up to humanity to decide, to choose, what that evolution and change will be, and exactly how it shapes and builds reality on this planet.

Many people spend time focusing on monetary issues because they are issues which have the most consequence for the most people. At present a system is in place that has more negative consequences for humanity than available, practical, optional systems – namely public banking. If one boils down all the academic explanations of the benefits of transformation of monetary policy and systems, one finds that public banking offers more benefits for humanity.

So the obvious question is: “if public banking is more beneficial for humanity, why hasn’t it been implemented and practiced worldwide?” It is because the few on Earth who have benefited, and are benefiting, to the detriment of the many, in the presently implemented system want to keep the status quo. It is in reality as simple as that.

So the basic fact of the present reality is that humanity has a choice.

And humanity will make that choice between two options: staying with a financial/monetary system which is owned and controlled by private interests for the benefit of a few – to the detriment of the many – or converting to a system which is controlled and owned by the many as a public service institution benefiting all people.

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The ultimate question is: what will humanity choose?

 

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Economic Crisis’ Cause: Screwiness Or Criminogenics?

English: Brooksley Born
English: Brooksley Born (Photo credit: Wikipedia)

Posted October 23, 2013

by Jerry Alatalo

“Money, money, money, monnn-ney… MON-ey.”  So goes the song by the Motown musical group The O’Jays, “For The Love of Money”, which came to the radios in the 70’s. To be honest, there are times when one wishes money were never created. Can’t Public Banking become implemented now as the new monetary system and replace the old debt-based, private-controlled central banking model? Well, they say patience is a virtue.

In this post we will find a large contrast in views between former Federal Reserve Chairman Alan Greenspan and Law and Economics Professor William K. Black of the University of Kansas City-Missouri. The very obvious contrast points to, in my mind, an intentional effort by those at the highest levels of management at the Federal Reserve to obfuscate or confuse the people.

In the first video (thanks to Kevin @ YouTube) we find Alan Greenspan on October 22 Daily Show with Jon Stewart. Mr. Greenspan”s book “The Map and the Territory” just came out, and he talks with Stewart about “what went wrong” in the events leading up to the 2008 economic crisis. In my opinion Greenspan speaks in a vague, hazy kind of way filled with generalizations.

The first few minutes before Alan Greenspan walks on are about glitches/problems with internet enrollment in the so-called Obamacare program, good for a few laughs.

Mr. Greenspan says “we” didn’t see it coming-that we thought banks would be better stewards of their capital, that they (the bankers) didn’t understand the risks out there. He goes on to say that markets do “weird” things, and that people are sometimes a little “screwy”. He said that we always thought that the “screwiness” would wash out. First, can the former Chairman of the Federal Reserve be any more vague and non-specific than, in effect, blaming the worldwide economic crisis on “screwiness”?

He goes on to “identify” the problem: in 1970 the New York Stock Exchange made some change that allowed broker/dealers to incorporate, which led to risk-taking that would not have occurred if the partnership arrangements were kept as the majority of brokers and dealers’ relationships-equity would have been protected. Mr. Greenspan suggests the easiest thing to do is increase capital requirements because, when banks fail it “rumbles through the system”.

He goes on to say “that those of us who look at that sort of “stuff” (totally lacking specificity) recognize…” He sums it up by saying that if there is enough regulatory capital, “then they can do a lot of things which you shouldn’t be able to…which you shouldn’t worry about.” I am still trying to determine if, when he said “shouldn’t be able to” and “which you shouldn’t worry about”, this was a sort of gaffe. Did Mr. Greenspan start that sentence and almost say “which you shouldn’t be able to do”, thereby admitting that fraud and criminality will continue even with increased capital requirements, his idea of an easy fix? Has retirement dulled his ability to obfuscate and confuse on his feet, where before he never had to stop in mid-sentence and correct himself?

Mr. Greenspan mentions zero, nada, zilch about the frauds and corruption, or his dealings with Brooksley Born, head of the federal regulatory agency overseeing derivatives, and her very urgent call to regulate the multi-trillion dollar, unregulated derivatives trading transactions-which were a major factor in the economic crisis-and which Born’s suggested regulation Greenspan, Larry Summers and others fought and blocked. Find the essential, astonishing Frontline episode “The Warning” which reports on Brooksley Born and her unsuccessful battle to regulate derivatives trading.

Alan Greenspan and Ben Bernanke are “Wizard of Oz” characters, the men behind the black curtain, who have used smoke and mirrors, obscuration, confusing, overly complex economic blather, and banking jargon as they are high-paid managers for the ultra-rich owners of the Federal Reserve Bank.  Ivory Tower economists who don’t mention the “downsizing” and “workforce reductions” which led to millions of American jobs sent to Mexico and China for low-wage workers. They are Ivory Tower economists who assert that Americans aren’t working because “entitlement programs are too generous”, calling on governments around the world to begin “austerity measures” so that their bosses, the owners of privately owned central banks get paid the principal plus interest.

Contrast Alan Greenspan to Bill Black.

In 2011 Bill Black received an invitation to speak before Congress as part of a panel of experts on the issue of derivatives. He accepted the invitation. Shortly before the panel convened and was ready to speak to Congressmen, Mr Black was “disinvited” because, he was made aware in email communication, he was going to “bash banks”, be “confrontational”, and may “cause damage to the reputations of banks”.

Before this he had testified five times, before both Democrat and Republican committees, about fraud, banking and regulatory matters. He has over thirty years of experience in law, white-collar crimes and economics, and led the effort to convict around a thousand savings and loan executives in the bank crisis of the 1980’s. Mr. Black says that the 2008 crisis is the biggest in 75 years, the economies of America and Europe have suffered devastation, and nothing fundamental has changed.

Mr. Greenspan failed to note in his conversation with Jon Stewart, as Mr. Black does here, that millions of fraudulent “liars loans“, 40% of the mortgages made, were largely responsible for the crisis. Bill Black emphasizes that “liars loans” are fraud and they are crimes. Mr. Greenspan must have missed the “liars loans” meetings.

Mr. Black quotes Mr. Greenspan when he spoke to Brooksley Born about her push for the regulation of derivatives, “I don’t think there is any need for laws against fraud. The market will take care of itself”.

So, was the 2008 crisis caused by, as Alan Greenspan put it, “screwiness”, or as Bill Black sees it, “criminogenics”?

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The Public Banking Solution. It Is Time.

English: Clockwise from top-left: Federal Rese...
English: Clockwise from top-left: Federal Reserve, Bank of England, European Central Bank, Bank of Canada (Note: Uploaded for use on Wikinews) (Photo credit: Wikipedia)

Posted October 12, 2013

by Jerry Alatalo

It is safe to say that a large percentage of the human race has an awareness, a feeling, that there is something wrong with the banking system on Earth. For most men and women reading these words there is a higher level of awareness about how money becomes created and who owns the world’s private central banks – Federal Reserve, European Central Bank (ECB), World Bank, International Monetary Fund (IMF), and Bank for International Settlements (BIS).

Just as in a small-town bank the wealthiest individuals and families in that town own it, the private central banks in those nations where they operate, in small and large countries, are owned by the wealthiest people on Earth-the “Big Town”. One has memory of Mr. Ross Perot’s famous line delivered in a 1992 presidential debate, not directed toward banks but toward the North American Free Trade Agreement (NAFTA), where he described  a “huge sucking sound” of jobs moving from America to Mexico and other countries where corporations have since set-up shop with employees working for much less money than Americans.

His “huge sucking sound” reference can easily apply to private central banking, where money has been circulating for centuries, with vacuüm cleaner efficiency, up from average citizens, and through the tube to the owners/stock-holders of those banks.

Everyone on Earth now knows what has occurred through history regarding this private central banking phenomena and realize that, like the Jack Nicholson movie, “Something’s Gotta Give”. In an earlier post I predicted that the Federal Reserve as we know it will end. Public banking is an idea whose time has come. Thanks to many men and women around the world, including Ellen Brown in this interview, founder and president of the Public Banking Institute, people are now moving and taking the necessary actions to create public banks.

There are more than twenty states in America which are initiating action to set up state-owned public banks along the lines of the state-owned Bank of North Dakota.

In this interview Ellen Brown stressed the absolute importance of citizens’ becoming fully informed about the public banking solution. She points out that it is essential for as many men and women as possible to have a full and complete knowledge of banking before they can advocate and bring public banks into reality. There is a lot of misunderstanding and ignorance about banking. An excellent place to learn about public banking are at Ellen Brown’s very good websites. Here are two of them:

The Bank of North Dakota is the sole repository of the state’s deposits and revenues. It is a huge deposit and asset base which returns the profits to the bank/people instead of seeing those profits going to Wall Street. Ms. Brown mentions that 40% of banks around the world are state-owned public institutions. She then mentions the BRICS financial alliance (Brazil, Russia, India, China, South Africa) which represents 40% of the population on Earth.

Germany has public banks in some of their cities and counties which facilitate loans at low-interest for local businesses and for infrastructure projects. What is important to note is that public banking has no speculative transactions like Wall Street, where reckless gambling on derivatives, interest rate swaps, and other complex transactions, with customer deposits, led to multi-billion dollar losses which the American taxpayers bailed out. Wall Street operators made huge, risky bets using their customer’s money to earn profits for themselves.

It is casino gambling which has led to hundreds of trillions of dollars in derivatives trading. Bank of America and Chase have upward of 70-80 trillion dollars worth of derivatives on their books. Ms. Brown describes the “shadow banking system”, the wild-west aspect of finance, where operators routinely gamble recklessly with billions of dollars of bets, and super-priority claims of derivatives in bankruptcy cases such as is the current situation in Detroit.

She notes that it is time for a new banking system which will allow none of the massive fraud and corruption which led to the financial crisis of 2008, continuing to this day.

With the next inevitable burst of the financial bubble-since the beginning of the Federal Reserve System in 1913 the boom and bust cycle has marched on relentlessly-the situation will find the nation in a place where there is 25 billion dollars in the FDIC, and the Dodd-Frank provisions by law allow no government bail-out(s). At that point the bankrupt banks will turn to “bail-ins”-the banks will take depositor money to re-capitalize themselves.

Public banking is the solution.

 

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