Thursday, March 5, 2009

Thats What We Need: More Debt.

(Portrait of what some bankers hope is the American Dream)
The shortsighted and inherently self serving government cartels this week launched a program to spur lending for autos, education, credit cards and other nonsensical consumer loans by providing up to $200 billion in financing to investors for the purpose of extending and expanding the withering credit markets.

The program, dubbed the Term Asset-Backed Securities Loan Facility, (TABS) was created by the Fed in conjunction with The Treasury Department. First announced last year, and existing separately from the huge "stimulus and bailout" packages passed in recent months by congress, (which incur huge amounts of Public Debt) the program has the potential to generate up to $1 trillion of lending for businesses and households (to encourage the accumulation of Private Debt) (if you have trouble understanding how a 200 billion dollar loan can equal 1 trillion dollars in lending liquidity, please watch Money as Debt, and you will quickly see that that is only the beginning, and that the actual amount will be much greater as those initial loans are deposited in other financial institutions)

Participants, consisting of companies and investors who will pledge eligible collateral to back the loan, most likely consisting of poorly rated securities that would otherwise be unviable in the free market, must request the new government loans by March 17. The Fed will then provide three-year loans on March 25.

While most of the financial witches den is a-twitter at the prospect of new funny money with which to expand credit and eventually (with interest) their own pocketbooks (at the cost of personal and business indebitude), some analysts fear that the program will be detrimental even for the financial industry's fleecing goals. Anil Kashyap, a professor at the University of Chicago's Booth School of Business, in a recent Breitbart Report, said "the program should make it easier for consumers to get loans, but cautioned that the Fed's involvement in this area could have unintended consequences elsewhere by making other debt securities not backed by the government less attractive to investors."

"We'd really rather the credit markets just work properly," Kashyap said.

Some more enlightened fellow replied that the credit markets haven't worked correctly in some number of years, and that he just wished the madness would end, and people would start taking some personal responsibility for their own expenses. "Working properly" would be working in a world where the amount of materials, plus the amount of labor going into a given good, would come near to equaling the value of the good, something that cannot exist in unsustainable and inherently unstable debt based consumption economy.

The Fed plans to keep the program running through December, but said it could be extended, which i have no doubt it will, along with many other programs and schemes The Fed has started or become involved with since aug 2007.

Total Fed lending exceeded $2 trillion for the first time Nov. 6 2008 after rising by 138 percent, or $1.23 trillion, in the 12 weeks since Sept. 14, when central bank governors relaxed collateral standards to accept securities that weren’t rated AAA (and therefore werent worth accepting as any real value.)

Fed lending as of Feb. 25 was $1.92 billion.
On Feb. 23, the Fed disclosed a breakdown by broad categories for $1.81 trillion of collateral pledged by banks and bond dealers (as of Dec. 17) after Congress demanded more transparency from the secretive banking cartel, which had been entrusted to oversee and dole out the last two Bailout measures approved by congress, (AIG and TARP) and then refused to disclose even the names of the people or entities receiving the congressional funds.

The largest portions of collateral being held by the Fed at that time were $456 billion in commercial loans, $203 billion in consumer loans and $159 billion in residential mortgages, according to the central bank’s Web site. It didn’t identify any loans or provide their credit ratings and said it will update the figures about every two months, hardly the transparency or accountability the congress asked for.

Government loans, spending or guarantees to rescue the country’s financial system total more than $11.7 trillion since the international war on non cartel ownership began in August 2007.

Much talk has been made, as of late, concerning the fraud that seems to have riddled the financial markets, and perhaps underpinned the current financial crisis, from the infamous Madhoff Scandal to allegations of corruption at Freddie Mac and Fannie Mae. While it is true that fraud does exist (on more levels than most care to admit) it is hardly the root of the problem today. (Nor is it the justification for the Mother of all Bailouts)

The people involved willfully misrepresented the facts for monetary gain, and are therefore guilty of fraud, but no one seems to be asking, "Did they have any choice?"

To have been honest in such a financial market would have been to commit financial suicide.

The fact is that the federal reserve system itself is inherently fraudulent, and provided, (in the form of Greenspan's infamous 1% interest rate, et al) the various incentives to commit that fraud, designed to balloon the economy back to life through increasingly thinly stretched derivatives of derivatives, to pay off an unsustainable and inherently unstable debt based consumption economy.

As i commented a few weeks ago on a story posted by WRS on financial fraud:

Its fine to point out that its just a shell game, and that these assets
were leveraged so far that they were essentially worthless, but you must
realize that you aren't the only one that could see that, including the
bankers that were buying those leveraged assets
. The fact is, those assets
would not have sold on an open or deregulated market. The only reason they were
sold and resold (to such moral peril!) was that the incentive to do so was
dutifully provided by the Federal Reserve/Federal Regulatory Agencies with the
additional, bankable, implied backing of the full faith and value of the
American government.

The same thing has been done for years by the foreign branch of the Fed,
the IMF, and when those loans cant be paid back, (they weren't viable) what do
they do? they go to congress, and ask Americans to pay them off. Whats the
difference here?

That's where the value came from, and why those banks kept selling (and

American Government Interference, in addition to the inherently fraudulent
way that money is created, in the Federal Reserve System, is what gave those
leveraged assets continued value beyond what the market could honestly bear, and
is the source of ALL of the fraud we are seeing today.

As for Madoff, how is what he did any worse than what Bernake does every

The same story continues here, this week, as The Fed, a secretive and private bankers cartel, uses more authority swindled from the American Legislative to prop up unviable and commercially worthless securities, that would be untradable at these values, with the FULL FAITH of the American People.

And what do the American people get out this arrangement? More crushing debt, grossly inflated prices, lower pay for the same amount of labor, and the sustainment of a doomed bubble that will only worsen the longer it is is prevented from correcting. 

Good Job, im glad The Fed was able to solve that problem.

Its time for the American people to stop believing in The Fed, and start moving into a responsible future where history, and time is owned by those who make it.

Abolish the Fed.
Own Yourselves.

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