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. 


(Thank to The BigPicture RT @ YouTube)

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.


The ultimate question is: what will humanity choose?


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