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Why Congress Won't Touch Jamie Dimon: JPM Derivatives Prop Up US Debt

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Is there no alternative but to succumb to the Mafia-like Wall Street protection racket of a covert derivatives trade in interest rate swaps?  As Willie and Kirby observe, that scheme itself must ultimately fail, and may have failed already.  They point to evidence that the JPM losses are not just $3 billion but $30 billion or more, and that JPM is actually bankrupt. 

The derivatives casino itself is just a last-ditch attempt to prop up a private pyramid scheme in fractional-reserve money creation, one that has progressed over several centuries through a series of "reserves"--from gold, to Fed-created "base money," to mortgage-backed securities, to sovereign debt ostensibly protected with derivatives.  We've seen that the only real guarantor in all this is the government itself, first with FDIC insurance and then with government bailouts of too-big-to-fail banks.  If we the people are funding the banks, we should own them; and our national currency should be issued, not through banks at interest, but through our own sovereign government. 

Unlike Greece, which is dependent on an uncooperative European Central Bank for funding, the U.S. still has the legal power to issue its own dollars or borrow them interest-free from its own central bank.  The government could buy back its bonds and refinance them at 0% interest through the Federal Reserve--which now buys them on the open market at interest like everyone else--or it could simply rip them up. 

The chief obstacle to that alternative is the bugaboo of inflation, but many countries have proven that this approach need not be inflationary.  Canada borrowed from its own central bank effectively interest free from 1939 to 1974, stimulating productivity without creating inflation; Australia did it from 1912 to 1923; and China has done it for decades. 

The private creation of money at interest is the granddaddy of all pyramid schemes; and like all such schemes, it must eventually collapse, despite a quadrillion dollar derivatives edifice propping it up.  Willie and Kirby think that time is upon us.  We need to have alternative, public and cooperative systems ready to replace the old system when it comes crashing down. 

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Ellen Brown is an attorney, president of the Public Banking Institute, author of 12 books including WEB OF DEBT and THE PUBLIC BANK SOLUTION, and a candidate for California treasurer running on a state bank platform. See (more...)
 
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According to the World Bank one  reason histo... by Ernie Messerschmidt on Thursday, Jun 21, 2012 at 12:50:50 PM
"If the American people ever allow private banks t... by Lance Ciepiela on Thursday, Jun 21, 2012 at 5:30:57 PM
signed the petition. I hope more people with the h... by intotheabyss on Thursday, Jun 21, 2012 at 8:36:27 PM
 If you had ten dollars in your pocket and de... by Tom James on Thursday, Jun 21, 2012 at 10:24:27 PM
About 30 years ago, I became aware that the Federa... by Gary Murphy on Saturday, Jun 23, 2012 at 12:14:26 PM
"Moody's downgrades credit of 5 big U.S. banks"cli... by Mike Preston on Thursday, Jun 21, 2012 at 10:19:06 PM
Thanks Mike, very interesting!  Will check al... by Ellen Brown on Thursday, Jun 21, 2012 at 11:14:16 PM
The groaning tower of debt has been constructed in... by Paul Repstock on Friday, Jun 22, 2012 at 11:10:10 AM