How Money Rules
Fourth Generation Warfare
If people are really concerned about their economic circumstances they would organize to make political the nationalization of banks at the local level to provide an alternative currency. As Buckminster Fuller said: "You never change things by fighting the existing reality. To change something, create a new model that makes the old model obsolete." And from the Web of Debt article below: "Post-COVID-19, the world will need to explore new models; and publicly-owned banks should be high on the list." Quantitative easing is "linear warfare" on the masses by the financial oligarchs telling you there have to be cutbacks and austerity programs implemented. While simultaneously this financial oligarchy that has captured the government pumps trillions into the financial markets. Most people don't clearly understand money and their definitions are often unclear and bogged down with disputed opinion.
Central Bank Stimulus Quantitative Easing 5.0 with John Titus
________
Source: Web of Debt
Another Bank Bailout Under Cover of a Virus
May 18, 2020 | by Ellen Brown
Insolvent Wall Street banks have been quietly bailed out again. Banks made risk-free by the government should be public utilities.
When the Dodd Frank Act was passed in 2010, President Obama triumphantly declared, "No more bailouts!" But what the Act actually said was that the next time the banks failed, they would be subject to "bail ins" – the funds of their creditors, including their large depositors, would be tapped to cover their bad loans. Then bail-ins were tried in Europe. The results were disastrous.
Many economists in the US and Europe argued that the next time the banks failed, they should be nationalized – taken over by the government as public utilities. But that opportunity was lost when, in September 2019 and again in March 2020, Wall Street banks were quietly bailed out from a liquidity crisis in the repo market that could otherwise have bankrupted them. There was no bail-in of private funds, no heated congressional debate, and no public vote. It was all done unilaterally by unelected bureaucrats at the Federal Reserve.
"The justification of private profit," said President Franklin Roosevelt in a 1938 address, "is private risk." Banking has now been made virtually risk-free, backed by the full faith and credit of the United States and its people. The American people are therefore entitled to share in the benefits and the profits. Banking needs to be made a public utility.
The Risky Business of Borrowing Short to Lend Long
Individual banks can go bankrupt from too many bad loans, but the crises that can trigger system-wide collapse are "liquidity crises." Banks "borrow short to lend long." They borrow from their depositors to make long-term loans or investments while promising the depositors that they can come for their money "on demand." To pull off this sleight of hand, when the depositors and the borrowers want the money at the same time, the banks have to borrow from somewhere else. If they can't find lenders on short notice, or if the price of borrowing suddenly becomes prohibitive, the result is a "liquidity crisis."
Before 1933, when the government stepped in with FDIC deposit insurance, bank panics and bank runs were common. When people suspected a bank was in trouble, they would all rush to withdraw their funds at once, exposing the fact that the banks did not have the money they purported to have. During the Great Depression, more than one-third of all private US banks were closed due to bank runs.
But President Franklin D. Roosevelt, who took office in 1933, was skeptical about insuring bank deposits. He warned, "We do not wish to make the United States Government liable for the mistakes and errors of individual banks, and put a premium on unsound banking in the future." The government had a viable public alternative, a US postal banking system established in 1911. Postal banks became especially popular during the Depression, because they were backed by the US government. But Roosevelt was pressured into signing the 1933 Banking Act, creating the Federal Deposit Insurance Corporation that insured private banks with public funds.
Congress, however, was unwilling to insure more than $5,000 per depositor (about $100,000 today), a sum raised temporarily in 2008 and permanently in 2010 to $250,000. That meant large institutional investors (pension funds, mutual funds, hedge funds, sovereign wealth funds) had nowhere to park the millions of dollars they held between investments. They wanted a place to put their funds that was secure, provided them with some interest, and was liquid like a traditional deposit account, allowing quick withdrawal. They wanted the same "ironclad money back guarantee" provided by FDIC deposit insurance, with the ability to get their money back on demand.
It was largely in response to that need that the private repo market evolved. Repo trades, although technically "sales and repurchases" of collateral, are in effect secured short-term loans, usually repayable the next day or in two weeks. Repo replaces the security of deposit insurance with the security of highly liquid collateral, typically Treasury debt or mortgage-backed securities. Although the repo market evolved chiefly to satisfy the needs of the large institutional investors that were its chief lenders, it also served the interests of the banks, since it allowed them to get around the capital requirements imposed by regulators on the conventional banking system. Borrowing from the repo market became so popular that by 2008, it provided half the credit in the country. By 2020, this massive market had a turnover of $1 trillion a day.
Please go to Web of Debt to read the entire article.
________
Source: Wall Street On Parade
U.S. Debt Crisis Comes into View as Fed's Balance Sheet Explodes Past $7 Trillion
By Pam Martens and Russ Martens: May 29, 2020 ~
On May 29, 2019, the Federal Reserve’s balance sheet stood at $3.9 trillion. As of this past Wednesday, May 27, 2020, the Fed's balance sheet had skyrocketed to $7.145 trillion, an increase of 83 percent in one year’s time.
But the explosion in the Fed's balance sheet cannot be attributed solely to the economic downturn caused by the COVID-19 pandemic. The math and the timeline simply do not support that argument. According to the timeline at the World Health Organization, on December 31, 2019, China first reported a cluster of cases of pneumonia which were identified in early January to be the coronavirus now known as COVID-19. These were the first known cases anywhere in the world.
But on December 31, 2019, the Federal Reserve was already deep into a debt crisis in the United States. We know that from the minutes of the Federal Reserve's Open Market Committee. The Fed minutes for the meetings on December 10-11, 2019 state that the Fed's emergency repo loans (that it had started making on September 17, 2019 for the first time since the financial crisis of 2008) had "totaled roughly $215 billion per day" as of the date of that meeting.
Using the Fed's own Excel spread sheet data for its emergency repo loans, Wall Street On Parade reported on January 27 that the Fed had made $6.6 trillion cumulatively in emergency revolving repo loans to Wall Street since September 17. The first death in the U.S. from COVID-19 did not come until February 28 and was reported by CNN one day later.
Repo loans (repurchase agreements) are typically routine overnight loans between banks, mutual funds and other financial institutions. The institution borrowing the money provides high quality bonds (typically Treasury securities) as collateral and signs an agreement to buy back the securities at a specified price. The difference in the price is effectively the interest charged on the loan.
The Fed started out on September 17 offering overnight loans of $75 billion daily. Three days later, on September 20, it added 14-day term loans. On October 23 the Fed announced that its daily repo loans would be increased from $75 billion to $120 billion while its term loans would continue. On December 12, the Fed announced that it would supplement its repo loans by adding a 32-day loan of $50 billion to its ongoing, twice per week term loans of 14-days and it would increase its overnight loans from $120 billion to $150 billion on December 31, 2019 and January 2, 2020. The Fed said it would also add an extra $75 billion overnight loan, thus bringing an extra $185 billion of liquidity over the turn of the year on top of its ongoing repo loans.
The Fed has subsequently added an alphabet soup listing of Wall Street bailout programs, many of which have been resurrected from the days of the 2008 crisis.
Today, the Fed's balance sheet shows that its repo loan program is still ongoing with a $181 billion balance outstanding. Emergency lending from the Fed's Discount Window stands at $18 billion. Emergency loans to the trading houses on Wall Street under its Primary Dealer Credit Facility (PDCF) stands at $6 billion. Buying up undesirable debt from money markets under the Money Market Mutual Fund Liquidity Facility (MMMFLF) shows a balance of $33 billion. Scooping up unwanted commercial paper under the Fed's Commercial Paper Funding Facility (CPFF) stands at $12.79 billion. Making outright purchases of investment grade and junk-rated corporate bonds under its Corporate Credit Facilities (which is targeted to expand to $750 billion by September 30) was just launched three weeks ago and currently stands at $34.85 billion.
Please go to Wall Street On Parade to read the entire article.
________
Public finance is being intentionally undermined to drive further privatization...
Related:
Game On
"If everyone in the world right now claimed the origin of their fertilization the entire banking system would collapse."
Human Embryos Used as Pawns In Zionist Activism
Satanist Banking System Explains Our Woes
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.