Share on Google Plus Share on Twitter Share on Facebook 8 Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit 1 Share on StumbleUpon 1 Tell A Friend 3 (13 Shares)  
Printer Friendly Page Save As Favorite View Favorites View Stats   5 comments

Exclusive to OpEdNews:
OpEdNews Op Eds

How and Why the Operations of the Fed Will Eventually Bring Down the Economy

By (about the author)     Permalink       (Page 2 of 5 pages)
Related Topic(s): ; ; ; ; , Add Tags Add to My Group(s)

Supported 3   Must Read 2   Well Said 2  
View Ratings | Rate It

opednews.com Headlined to H3 4/12/12

Become a Fan
  (109 fans)

Fractional reserve:  The private fabrication of our "money" by way of a never ending series of simple bookkeeping entries by banks . . is how fiat money (i.e. money created from nothing) originates.  Example:  Holding 100,000 dollars of depositors' money allows a bank to lend out 1,000,000 dollars that it creates out of thin air, by simply making bookkeeping entries in the bank accounts of loan recipients.

However, in the court case referenced in the quote at the beginning of the article, Justice Mahoney ruled against a bank acting in conjunction with the Federal Reserve Bank of Minneapolis, in the bank's efforts to foreclose upon and "buy" a US citizen's house by simply creating (out of thin air) "the entire $14,000 foreclosure purchase money (credit) within its own books, by means of nothing more than a simple bookkeeping entry."  Further, "Mr. Morgan (the plaintiff/bank representative) admitted in court that no United States Law or Statute existed which gave him the right to do this."  (Click here)

Stage two:  Delusional, unregulated value assignment, manipulation, and expansion

After money is created out of thin air, other market mechanisms magnify, funnel, and package this value-from-nothing further still, creating financial vehicles that add yet more numbers (money) without adding more value. 

Leverage:  The practice of arbitrarily multiplying the alleged value of one's holdings, in order to acquire controlling interest in a given property.  This mechanism is a favorite of now-discredited corporate raiders and leveraged buy-out (LBO) firms that are currently referred to with the euphemism, "private equity firms."  This claimed private equity can be a kind of fictitious multiplication of a self-assessed asset value that is then used to buy a controlling interest in a productive company.
 
Typically the acquired company is put into debt, its real assets hollowed out and harvested, and then the acquired company is allowed to go bankrupt, thus providing a killing (from the hollowing out and harvesting) for the raiders, while destroying the ability of the thereby displaced workers to make a living.  (Unhinged: When Concrete Reality No Longer Matters to the Market (and What to Do About It)).  (Click here)

Over the counter (OTC) derivatives:  Purely unregulated, non-transparent, and malignant uncollateralized bets and hedges on market movements, requiring no assets or stake in assets.  Of the over 700 trillion dollars of "notional value" in OTC derivatives disclosed by the International Bank of Settlements for 2011, the majority were supposedly "benign" interest-rate and currency swaps, not the more toxic credit default swaps.  However, it was a Goldman Sachs currency swap with "a fictitious exchange rate" that sunk Greece, nearly doubling its liability on just one deal, from about 2.8 billion euros to over 5 billion euros.  (How Goldman Sachs Helped Corrupt Politicians to Screw the Greek People). (Click here)

Also remember the undisclosed OTC derivatives market may easily be bigger than the disclosed market. 

Rehypothecation:  The process of recycling or repeatedly using the same collateral in multiple deals and with multiple entities.  England has no legal limit on how many times collateral can by rehypothecated (i.e. used in this repetitive way).  (Shadow Rehypothecation, Infinite Leverage, And Why Breaking The Tyranny Of Ignorance Is The Only Solution)  (Click here)

MF Global exposes the 2011 equivalent of the 2008 AIG, in that virtually unlimited leverage via the shadow banking system (in which there are practically no hard assets backing the infinite layers of debt created by the means just described).  This shadow banking system will eventually lead to a cataclysmic collapse of all financial institutions.  Why?  Because every bank is daisy-chained to others, courtesy of multiple layers of "hypothecation, and re-hypothecation."  (Why The UK Trail Of The MF Global Collapse May Have "Apocalyptic" Consequences For The Eurozone, Canadian Banks, Jefferies And Everyone Else) (Click here)

For a concise explanation of the related mechanisms of collateralized debt obligations (CDOs), synthetic CDOs, credit default swaps (CDSs), naked short selling, and high frequency trading (HFT), see When The Market Has Cancer.
(Click here)

Stage three:  Usurping democracies and cannibalizing functioning capitalism

A cartel of international wealth counterfeiters have boldly made claims on Greece's national wealth through supra-national entities like the European Central Bank.  These claims are not backed by clear legal authority or logic, but they are being enforced anyway, administered by unelected technocrats, and then "agreed to" by complicit politicians acting against the interests of the citizens who elected them. 

Greece (with more countries to follow) is being treated like a company town where "costs" (i.e. social services) are to be cut, worker productivity milked through ever greater taxation, and debt servitude reinforced.  The cancer of corrupted capitalism thereby continues to metastasize:  And now that phantom paper profits are collapsing for the counterfeiters, real assets must be taken over so as to fill in the gaps. 

Greece's national assets have therefore essentially been put up for sale, thereby endangering its national sovereignty and its right to control and keep its own property.  Thus a new form of colonialism is born.  Greek well-being is being systematically diminished through the austerity programs that this new kind of colonization requires.  Counterproductively for Greece, this has caused the economy to contract at an accelerating rate.  Seizing control of productive assets, and cannibalizing real wealth, so as to feed illegitimate demands, seem to be the primary (but unstated) goals of these strategies, because the empirical results of these strategies clearly run counter to stated objectives. 

Disaster capitalism (The Shock Doctrine):  The intentional infliction of insecurity, suffering, and scarcity on a population, so as to cause panic, compliance, and "amenability' to exploitation and wealth extraction.  Here is a thoroughly vicious business model that operates in plain sight.  When abuse no longer has to be organized and covered up by conspiracy, it confirms that capitalism's illness is in an advanced stage.  It is amazing how easily assets can then be "acquired' (stolen) and individual rights denied (as with fraudclosure), when people are overwhelmed by corruption on all sides. 

Stage four:  Implosion of the body politic -- or necessary transformation and redirection?

Next Page  1  |  2  |  3  |  4  |  5

 

Several years after receiving my M.A. in social science (interdisciplinary studies) I was an instructor at S.F. State University for a year, but then went back to designing automated machinery, and then tech writing, in Silicon Valley. I've (more...)
 

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon

Go To Commenting
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Follow Me on Twitter

Contact Author Contact Editor View Authors' Articles

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

New JFK assassination bombshells

Was Pat Tillman Murdered by an American Sharpshooter to Shut Him up?

The cholesterol - heart disease scam: How the medical-industrial complex is raking in billions at our expense

Two U.S. presidents implicated by ex-CIA black-ops assassin

Four Ticking Time Bombs That Will Soon Ignite a Revolution

The Ultimate Goal of the Bankster-led Political-economic Warfare Being Waged Against Us Is . . . ?

Comments

The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
4 people are discussing this page, with 5 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)

What has this crazy economy of ours now wrought?&n... by Richard Clark on Thursday, Apr 12, 2012 at 2:25:33 PM
And this puts the exclamation point on it! How ... by Thomas Brown on Friday, Apr 13, 2012 at 11:13:25 AM
withholding taxes,to pay the interest on  cou... by bogi666 on Saturday, Apr 14, 2012 at 8:55:28 AM
Education is the only solution to solving this mos... by Thomas Brown on Friday, Apr 13, 2012 at 11:09:47 AM
The counterpoint to debt based fiat money is d... by Robert Bostick on Saturday, May 5, 2012 at 4:10:46 PM