The Money Masters

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Writer Beat contributor Face Palm and I have been having some interesting discussions, agreeing on a few things and disagreeing on a lot more. Part of the fun when civil discussion ensues is learning new things from other people whose perspectives differ from mine. Anyways, Face Palm convinced me to take a look at a 1996 documentary called “The Money Masters”. But I was skeptical: I got out my tin foil hat in case any radiation from a whacky conspiracy theory found its way to my computer screen.

 

Before I begin my review, I shall just provide some background information. I enrolled in a distance MBA program from Heriot-Watt University. Part of that program was an extensive course on economics, which was at a higher level than my previous three economics courses. The course was divided into four parts: (1) Microeconomics, (2) Macroeconomics, (3) Keynesian Economics, and (4) Monetarist Economics. I was able understand the charts and graphs and theories of the first three sections, but the monetarist section had me in a haze. I got 57% as a final mark in the course, probably getting close to 0% on that last section.

 

But just because I did poorly on the monetarist exam does not mean I didn’t learn anything about it. For starters I learned that governments, with their central banks, have quite a few more tools to handle deficit financing for a long time. As long as the GDP grows in concert with deficit, the deficit is manageable. As well, I learned that the wizards in the central banks were adjusting interest rates and money supply to walk a fine line between a growing economy, inflation, and a little unemployment. Finally, I understood why the central banks operations were distant from the political process. For example, a governing political party could increase its chance of winning the next election by dropping interest rates a half point six months before to stimulate the economy, thereby gaining votes. But the balance on that fine line would be lost, so letting politicians make monetarist decisions is not a good idea. In other words, the central banks were mostly concerned about creating a stable economy for the benefit of society.

 

However, I did not expect the wizards to be perfect. If you have ever operated a big machine of some kind, you may have reached a point where you felt in concert with this machine. Despite achieving this state of zen between man and machine, sometimes that machine still breaks down without much warning. The economy is a really big machine, so I accepted that the wizards are likely to fail from time to time despite their training and access to data. And sometimes we may not hire the best of wizards.

 

Within three minutes, William Still (writer/producer/director/narrator) made an astounding claim:

 

“The truth is that the Federal Reserve [USA’s central bank] is a private bank owned by private stockholders and run purely for their private profit”

 

WHAT THE HELL?

 

I was under the impression that central banks were public institutions, albeit quite separated from politicians. I couldn’t see this documentary telling an outright lie. At that point, I had to finish the documentary. Within a half hour, I took off my tin foil hat.

 

The 3.5-hour documentary is peppered with history vignettes, many of which are well known, but tied each vignette in the construct of the money masters—or the central banks. I’ll just provide a few here.

 

The European central banks financed both sides of the various wars. For example, they financed Napoleon on his march to Moscow. With French army decimated, the banks then financed the English to defeat Napoleon at Waterloo. All the while, the banks were involved in arms manufacturing, selling to both sides. After the war, French, English, and Prussian citizens were indebted to the banks through the actions of their governments.

 

According to Mr. Still, the central banks of Europe wanted to see a divided America. So they financed the South to officially start the Civil War. The banks would not support the North, so Mr. Lincoln had to invent his “greenback” strategy to finance his side of the war. When victory for the South was not imminent, the central banks cut off the South’s credit—which probably ended the stalemate.

 

The first two versions of the American central bank got started with the following structure. The American government went into partnership with several American and European banks. The government put the first 20% of capital required into the central bank. Then the central bank loaned that money out several times to the partners, who then used it to buy their share of the central bank. In other words, the partner banks never put one dollar into a very profitable business arrangement for them, yet they maintained the most of the control.

 

If each of these stories is standing alone, it would be easy to give each of them its own tin foil hat. But this documentary is 3.5 hours for a good reason: it shows a pattern. The central banks have played an important role in most of the world’s historical turning points. And the banks’ influence was seldom about the welfare of society; it was about profit for the owners of these central banks.

 

Mr. Still created this documentary in 1996. I suspect if we were to ask him about the 2008 recession, he would say “I told you so.” 

 

To briefly recap the 2008 recession, government regulations were removed from the banking industry circa 1995. Some banks started loaning money to people who couldn’t afford mortgage payment, using the rising value of the property as collateral. These banks then bundled these small “bad” loans and resold them as big packages of “good” loans. The economy boomed, raising the value of residential property to cover the inability of the mortgagees to pay. So this practice was allowed to continue for years. But long before the loans went into foreclosure, the original loaners had shed the inevitable liabilities these loans were carrying.

 

Why did the central banks allow this practice to happen? In this review, I have alluded to three possible reasons for the central bank’s failure to prevent the 2008 recession: (1) economics is still more of an art than a science—and we should expect mistakes from time to time, (2) the political process put an inept operator in charge, and (3) rules were changed to maximize profit for the central bank’s owners. Which reason is more correct?

 

One of the more interesting features of this documentary was that the power of the central banks was well known throughout the 1800s. The charter to form central banks were a hot political topic in American and Canadian politics. But today, the public knows so little about the banking industry, so the banks operate with more impunity than they had before. For example, I had the naïve belief that central banks were 100% owned by the governments.

 

I didn’t agree with Mr. Still on several places, but maybe if I was more versed in monetarist economics, I would have been able to follow him. For example, he suggested removing the fractional banking system altogether. My understanding is that such a move would make it more difficult to operate local bank branches. Without fractional reserves, a branch’s cash flow would be cut so severely as to not justify the expense of the building and its employees. But with internet banking becoming more popular, it just might be feasible to shut many of these branches down without affecting service quality. Then banking rules can be set to make $1 of deposits = $1 of loans, with banks being able to earn a reasonable profit. I can see without the factoring of the money supply, the central banks would be less likely to manipulate the economy—and society—for their own profit. 

 

Mr. Still’s call-to-action is for us to lobby our politicians to put an end to central banks. But the politicians are at least indirectly in cahoots with the central banks. For starters, the banks can fund political opponents if a politician ever gets too successful with his or her rhetoric against the banks, especially in the internal party elections. Second, today’s politicians are too distracted to ever challenge the banks in the same way they did in the 1800s. Finally, the central banks have a proven ability to crash an economy; they can punish a hostile political force, knowing the public will blame the politicians not the banks. In other words, the political process lives in fear of the central banks. So I don’t see politicians from today’s western democracies ever putting up a serious challenge.

 

And Mr. Still did not offer a reasonable replacement structure for the banking industry.

 

If we really want to curtail the power of the central banks, we need a new kind of political system to challenge the power of the central banks while creating a more credible and functional central banking structure that serves the people. Right now, the central banks manipulate all political parties. That bond has to be broken before any real change will happen.  

 

Link to "The Money Masters"

 

 

 

Comments

Thomas Sutrina Added Jan 12, 2019 - 2:26pm
Dave V., The US government destroyed a few of the wealthiest people in nation that helped the Federal government get out of money flow problems.  They didn't repay them.   
 
So when the government needed another bailout the Robber Barron banker knew this history and didn't want to be cheated.  That is why Congress and the president created the private federal Reserve bank.  That was the cost of bailing out the Federal Government.    They got the power to print money.  The once private bank notes became the ipso facto   government bank notes.
George N Romey Added Jan 12, 2019 - 3:41pm
The Fed has become the get out of jail card for free card for its shareholders, which are the large money center banks. Citicorp alone has been rescued a half of dozen times. If it's some small community bank in the heartland it will be allowed to fail. But Citicorp, Chase, Wells Fargo, etc, never.
 
The Fed has also legalized outright fraud and theft.  As such any criminal banker will never go to jail.
Gerrilea Added Jan 12, 2019 - 4:01pm
Dave V--- Nice write up and breakdown.  "Every war is a banksters war."
 
I've read both pro's and con's for the abolishment of Fractional Reserve Banking.  If it were based on a hard currency, I think we could have the best of both worlds, so to speak.  The key is that our Congress has been granted exclusive authority coin, print & set the value of money, as per the constitution.  They don't follow it at all. Rationalizations are "congress has delegated said authority".  That wasn't part of our deal.
 
That said, I think the max leverage should be 50%.  It gives us the flexibility to build our homes, roads, schools and even public assistance when needed.
 
We used to have "War Bonds" where We The People would put up our own money to fight a "just war".  I do not believe any war can be "just", but the idea was that if we didn't agree, with our money, it didn't happen.
 
I saw a video, years ago that gave a truly simple solution, I'll look and see if I can find it.
 
Give me a bit...It was about 8 yrs ago and YouTube banned in a couple of times. 
 
 
Ryan Messano Added Jan 12, 2019 - 4:51pm
If you weren't such a woman, along with Facepalm, Dave, and you got out of your he-motions,  you'd actually learn even more. 
Dave Volek Added Jan 12, 2019 - 6:41pm
Thomas
I didn't get the sense that the Federal Government was in any kind of financial peril before 1913. My understanding is that they thought the Fed Reserve would be better able to handle the money supply than some institution closer to government, thus minimizing the cycles. 
 
But if you have some further insights, I'd like to hear them. 
Dave Volek Added Jan 12, 2019 - 6:43pm
George
I went the Wikipedia article of the Federal Reserve. It said that only 38% of American banks own a portion of the Federal Reserve, which means 62% do not. It's not hard to imagine the Fed Reserve being used to benefit the 38%.
 
Dave Volek Added Jan 12, 2019 - 6:54pm
Gerrilea
I tend to agree that the politicians should maintain a big distance from the central banks. But I really don't have another solution in mind if we keep western democracy in place. To me, the solution lies in a different form of governance, where elected representatives are more trustworthy. But we are not there yet. 
 
When I took my economics course and when this documentary was made, it was understood that the factoring was set at 10, i.e. $1 in deposits = $10 in loans. I think that the rate has been raised quite a bit in the last 20 years, maybe even $1 to $100. If we are to get this factoring rate down to more reasonable levels, I believe it will mean some suffering in the economy. In other words, we have become hooked on a drug--and there will be some withdrawals symptoms.
 
About a year back, a WB contributor led me to another documentary about how WW2 was funded. Basically, it was an increase in the money supply. The War Bonds really had no purpose other than to convince people not to consume so much so that more resources could be directed to the war effort. Interesting hypothesis.
 
 
 
 
Ryan Messano Added Jan 12, 2019 - 7:02pm
One of the greatest forms of hatred, Dave is ignoring.
 
You have a lot of hatred in you.  Common in a proud person.  They absolutely hate to be corrected.  You already pitched your temper tantrum with an article a few years ago.  Now, your hatred is at a slow boil.  It's so transparent and pathetic. 
Dave Volek Added Jan 12, 2019 - 7:03pm
Mogg
I believe the central banks are indeed trying to find a good balance to keep the economy going. I hypothesize that the rule changes that caused the 2008 crash were designed to give the owners of the central banks a little financial edge over their competitors. The problem is that this edge became bigger than a mere blip in the overall economy--the central bank had no mechanism to haul it back in before it caused damage. 
 
It would have been interesting to be the fly-on-the-wall in the White House when it was decided to bail out the banks. I would have to agree that there could have been bigger economic repercussions had they not done so. 
 
As for private vs. public ownership, I would say that the American central bank failed miserably pre-2008 and does not seem to want to be subject to any regulations. In that matter, we should expect similar crashes in the future. It's time to give public ownership a chance. 
Ryan Messano Added Jan 12, 2019 - 7:04pm
Women hate with the silent treatment, men are supposed to have their big boy pants on and respond to criticism with reason and logic.   You don't do that.  Of course, it's very obvious you cannot easily do that, as your beliefs are paradoxical and contradictory.
Gerrilea Added Jan 12, 2019 - 7:31pm
Dave V--- Sadly I can't find the video.  What I recall, the gentlemen suggested we not end the fed reserve but take it over and doing so within a few years. We'd stop paying them to create the money for us and could pay down our debt with a 3% tax on all banking assets. 
 
God, I wish I could recall what the short documentary was called. I did 100's of searches and I thought I had downloaded at one time. Ugh.
 
Anyway,  our governmental systems have to have limits, controls and accountability. That's what we are missing today, accountability being the big one.
 
Most don't understand we had, for the first 150+ yrs of this nations existence, a deflationary expansion.  Yes there were crashes every 10 or 20 yrs but that stemmed from lack of legitimate controls on private industries and government alike.
 
Nothing should be allowed to become To Big To Fail. We really don't need "honorable" men/women in government if we had the correct controls.
 
Logical Man Added Jan 12, 2019 - 8:18pm
Dave, have a go at The Creature from Jekyll Island.
 
You should be able to find it as a pdf if you do a search.
Jeffry Gilbert Added Jan 12, 2019 - 8:36pm
America: Freedom to Fascism
 
Yet more of a wake up call. 
John Minehan Added Jan 12, 2019 - 8:51pm
The Panic of 1907 is usually seen as the event that triggered a new central bank.  Major bankers almost could not swing re-capitalizing the system.
 
Borrowers were part of the problem in 2008, but sales forces (and even upper-management) didn't understand the instruments.
 
Derivative Instruments, like High Yield/"Junk" Bonds, are not bad in themselves, useful tools . . . but they are risk investments and probably can't be made investment grade in any kind of quantity.
 
The liability the "Banksters" had was not criminal; it was potentially civil liability to shareholders for wasting assets based on not knowing the risks.     
The Owl Added Jan 12, 2019 - 10:18pm
I was with you to the statement that you were surprised that the central bsnks were owned and operated my private, for profit enterprises.  
 
I am not sure how Canada operates tits central bank, but in the United States, the central bank is owned and operated by regional Federal Reserve Banks operating in their respective geographical areas.
 
The regional banks are, in turn owned collectively by the banks that are members of the Federal Reserve area, again organized on a for-profit basis.
 
All of "Federal Reserve" banks lend money for interest and are free to invest money's on deposit...or passing through overnight...as long as their investments meet certain guidelines.  Their job are the same as the national Federal Reserve and provide liquidity to the system and act as the clearing house for interbank transactions.
 
The Federal Reserve was authorized in 1913 to combat the succession of "panics" throughout the 1890s and 1900s that wiped out banks and depositors as a result of liquidity crises, by providing cash in exchange for long term investments that couldn't be converted readily to cash to payout to panicked depositors.
 
I am sure that central banks in other countries operate forcsimilar purposes in similar ways, añthough actual ownership might belong to the state itself.
 
 
 
Do A Deal Added Jan 13, 2019 - 12:16am
Fricken Jews!
 
Do A Deal Added Jan 13, 2019 - 12:23am
If you folks would have read my blurb on the implementation of the Job Guarantee as part of a Full Employment Fiscal Policy you would have noted step 3):
"3) Revise Federal Reserve Act so Federal Reserve Bank reports to the Treasury."
 
And that's that.  Part of the Job Gty law would also include a provision which modulates inflation, if it goes above a target for say 6 months in a row, taxes are automatically levied: 1) Income, 2) sales/vat, and 3) asset value.  Interest rates could be set at zero or perhaps 1% for kicks.
 
Easy Peasy.
Do A Deal Added Jan 13, 2019 - 12:34am
Fractional Reserve Banking is a myth.  It conflates 2 constraints:
1)  Capital Ratios:  Regulators require banks to maintain Equity/Assets ratio at a minimum of approximately 10% (more or less).   This in no way constrains lending.  If there were profitable lending opportunities banks would raise capital from investors with no problem.  
2)  Reserve Requirements: The Fed requires banks in the US to maintain deposits at the Fed of at least 19% of their deposits.  This CAN constrain aggregate lending since if there is a shortage of reserves the fed fund rates spikes, but then the Fed injects reserves into the system by buying securities.  
FacePalm Added Jan 13, 2019 - 2:44am
Here's how banking - and later, fractional reserve banking - began, to my current level of understanding:
 
Traders from outlying districts would flock to cities to trade their goods.  Some of them had made ingots of various metals - lead, iron, silver, gold, tin, what-have-you  - and they would trade all or a portion of what they had mined, smelted, purified, cooled, and molded.
 
There were 2 problems with this: traveling with these ingots was tough because of their weight, and the ability of brigands/robbers to relieve them of their ingots on the way.
 
So what these traders learned to do was leave these ingots with gold-or-silversmiths, as they not only had vaults in which to keep the metals of their trades, but also guards for these.  The trader(s) would receive receipts for these ingots, and trade with those; the townsmen knew who the smiths were, and once the trade was complete, take the receipt to them and collect what made the receipt good.  (this is called "receipt money," 100% backed, ergo an honest money-system.)
 
Wasn't too long before the smiths realized they could make a heckuva lot more from being the middleman than by actually doing hard, often hot and intricate work, so they became the bankers.  They got better and better at producing receipts so as to minimize counterfeiting, but then, as people grew accustomed to trading the receipts, fewer and fewer would come to the vaults to obtain the metals which made the receipts good...so the banksters became fraudsters. and "lent" more paper than they had backing for, "increasing the money supply," and simultaneously causing inflation; this is why their greatest fear was a "run on the bank," as they could not possibly make good on all their outstanding IOU's.  This is also a reason why using precious metals to back the receipts is a Good Idea, because neither governments nor their agents can make any more of them, especially out of thin air.
 
Now, as to who owns the Fed?   Another great book to get a copy of is by the former mentor of BJ Billy, a professor at Georgetown U named Carroll Quigley, a "banker's insider" who wrote "Tragedy and Hope." 
 
In this ponderous tome, one learns of who the REAL owners of the Federal Reserve are, and it's mostly foreign banksters, to wit:
 
"It must not be felt that these heads of the world's chief central banks were themselves substantive powers in world finance. They were not. Rather, they were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up and were perfectly capable of throwing them down. The substantive financial powers of the world were in the hands of these investments bankers (also called 'international' or 'merchant' bankers) who remained largely behind the scenes in their own unincorporated private banks. These formed a system of international cooperation and national dominance which was more private, more powerful, and more secret than that of their agents in the central banks..."
- Professor Carroll Quigley, Tragedy and Hope: A History of the World in Our Time, 1966
 
These unincorporated(ergo beyond the reach of any "banking regulators") banks have their HQ in Basel, Switzerland, at the Bank of International Settlements, or BIS.  Even the US participants in the slavery-scheme that the Federal Reserve Board are administrators of have offices there.  i can name these banking cartels, if any desire to know....but it has nothing to do with "da Joos," other than what they lie and call themselves.  Christ laid out the criterion most apropos when He said, "Behold, an Israelite indeed, in whom there is no guile!"  Banksters are con-men/scammers/fraud promoters, and have been since the dishonest invention of the fraud of "fractional reserve."  But the "gangster" part of the "bankster" contraction hints at their willingness to use any and all means possible to continue their depredations and NWO/OWG plans, hinted at by he whom history designates as the "Father of the Constitution":
 
"History records that the moneychangers have used every form of abuse, deceit, intrigue, and violent means possible to maintain control over governments by controlling money and it's issuance."
~James Madison
 
There is ZERO "fractional reserve" banking today; there are no reserves against a run on the bank.  All the notes are purely fiat, wizarded out of thin air at a little over .02 per note("paid" for by more debt notes to the US Treasury), then "lent" to gov't on the promise of gov't agents to repay at face value plus interest, which they get by levying taxes on the ignorant hoi polloi.
Doug Plumb Added Jan 13, 2019 - 3:44am
Banks are able to, for example, lend out 90 % of their deposits. Each loan creates a new deposit. The geometric series from this results in 1000 dollars being lent out. That is where Stills "10:1" ratio comes in to play. Its misleading though.
  I would suggest reading JKG's "Money: Whence It Came: Where it Went" and his book on the great depression. He was one on the thinkers that created the Report From Iron Mountain according to Griffin, the author of "The Creature...", another good book on money.
  I explain in the third snippet of my movie, "Law, The Light Of Reason And Conscience" the nature of banking and the advantages of fractional reserve. None of the above references explain the nature of law and money and how they are the same.
  The problem is not fractional reserve. It is the owners of the central banks and their agenda for a Noahide law world government (communism). Jewish money means eventual Jewish law. The thing about Judaism is that it absolutely hates, with the "intensity of a thousand burning suns" all outsiders and wishes to subjugate/kill/torture and/or rape all outsiders.
  Dave you would understand more if you learned about the Bolsheviks.
Ward Tipton Added Jan 13, 2019 - 5:39am
I have not read all of the comments yet, but the article was interesting. I hate arguing semantics, however, there are some points I would contest wherein the verbiage is misleading in some limited sense. 
 
The Federal Reserve is a trust, not a bank. Thus, it falls under different regulations and has a lot more freedom than banks. 
 
Second, I believe you mean debt rather than deficit. The deficit is the amount spent above and beyond the income ... so for example, when Trump Admin and the IRS collect over three Trillion, but spend over four Trillion, there is a deficit of one Trillion ... as one trillion more is spent than is earned. 
 
If GDP kept up the pace with government spending ... or if government spending was restricted to a percentage of GDP, there would be no deficit. 
 
Now I will read the comments and try to join the conversation. Just wanted to get these points out of the way. 
Dave Volek Added Jan 13, 2019 - 10:38am
Gerrilea
That is one of the frustrating things with the internet: good links often disappear. 
 
My Wikipedia article on the Federal Reserve says the president appoints 12 governors to the central bank. However I kind of get the impression that these appointments are more patronage rather wise people to run the bank. The real powers behind the banks are nebulous.
 
Logical Man
Found the pdf. I shall take a look someday.
 
Jeffrey
I took a quick look at the video. I fear it is another of many paranoia.  
Dave Volek Added Jan 13, 2019 - 10:51am
John
I can't follow what you are saying.
 
The Owl
My readings on the Bank of Canada suggest it is more in the control of federal government and the government does respect the distance needed between it and the politicians. So it still operates independently. 
 
It is not easy to start a new bank in Canada. Part of the arrangement was to give the five main banks a bit of a monopoly in exchange for tighter government controls. For example, the Canadian banks were not allowed to issue loans that brought on the 2008 recession. We had no bank failures or bailouts. Our banks survived, and I think two of them went down south to start American subsidiaries, to fill a certain void. 
 
Maybe the Canadian model deserves inspection.
 
Do a Deal
I don't think the operations of the central banks are "easy peasy". And that was one fault of the documentary: Mr. Still thought the changes would be easy if only we would write to our congressmen. 
 
A good analogy would be most of us can drive a car, but very few of us are ready to take the controls of a Boeing 747. It is not easy. 
 
 
Logical Man Added Jan 13, 2019 - 10:52am
Face, I would agree with most of what you say, but if you do some serious poking around, all through history, the group you say it has nothing to do with shows up in the vast majority of the history of finance. The Bank of England was founded after William of Orange invaded England, having been financed by a member of said group and the majority of those holding the earliest assets of the bank were too. If you look at a list of, for want of a better term, the most important bankers in history the same applies. There are many examples.
Banking is now a criminal enterprise, whoever is running the show, and until people understand how it works nothing will change. Why do you think you are never taught about money in school?
Dave Volek Added Jan 13, 2019 - 11:01am
Face Palm
It is interesting how fractional reserves developed. Almost by happenstance. The question that should be asked: Do we really need it today? After all, most money is now electronic. 
 
In his documentary, Mr. Still alludes to strong foreign element in the Federal Reserve in 1913. But the Wikipedia article does not make any reference to foreign ownership.
 
But the relationship between all the central banks and the BIS (and World Bank and IMF) suggest that there is an international conglomerate making big decisions at the national levels. 
 
My brief studies of the 2008 recession suggested the 10 to 1 ratio of the 1990s was abandoned to the point that it was effectively zero fractional reserves. My understanding is that the Federal Reserve is still at this point, have not learned from its 2008 creation. 
 
 
Dave Volek Added Jan 13, 2019 - 11:13am
Doug
 
A new loan actually becomes a deposit somewhere else, which then is an impetus for a bunch more factored loans. This is the part of monetarist economics I just can't wrap my head around. It seems the money supply is on an ever increasing rise to infinity. 
 
If the governors of central banks were indeed knowledgeable on this art/science and were concerned about the welfare of the citizens, then I would say: "Leave these wizards to their own devices." However, it seems the appointments to the Federal Reserve are political hacks. Should we trust them? Or are these public positions just symbolic, with the real decisions made by others? 
 
The evidence is the 2008 recession. Whoever was running show set up a side business while managing the economy. That side business generated lots of profit for someone, and if it had stayed small, it might not have affected things. But the side business grew too big and interfered too much with the real economy. Then the crash.
 
There's something seriously wrong here. Who is running the show? Why won't they accept common sense regulations?
 
The Owl Added Jan 13, 2019 - 12:12pm
Dave, I think your hang-up comes in separating "money" from "cash".
 
"Cash" is necessarily money.  But all "money" is not cash.
The Owl Added Jan 13, 2019 - 12:27pm
Also, during the 2008 financial meltdown, the "banks" that were setting up the "side businesses" weren't "banks" in the terms used when referencing either the Federal Reserve or the retail banks that they service.
 
Those "banks" were actually investment firms, better known under the heading of "traders".  Many of them created derivative securities that then traded in the speculative values of the "bundled" assets.  When the real value of those "bundled assets" cratered, those "investment banks" were hit with an old-fashioned liquidity crisis, a "panic" in old-fashioned terms.  (Note:  Insurance companies are nothing more than trading firms with a different source for the money on which they gamble.)  Without the liquidity buffer that a reserve system provides, there was nothing to stop the "panic" from running its natural course.
 
(Note that in the United States, most of the failed "investment banks" elected to recharter themselves as "banks" to take advantage of the reserve capabilities offered by the Fed.  I thought it was a huge mistake to allow those entities like Goldman and AIG to make this conversion as the normal penalties for failed investments...certainly for most of those that invested in them other than the biggest clients...is a financial loss and/or bankruptcy.)
 
 
Doug Plumb Added Jan 13, 2019 - 1:24pm
re "Or are these public positions just symbolic, with the real decisions made by others? "
 
  Right, made by people like the Comittee Of 300 and the Privy Council. They are almost all Jewish. Jew do not like the common law, it's why they killed Christ.
  People that work for the system often joke that they work for Satan. This is as a matter of fact, true.
 
re "There's something seriously wrong here. Who is running the show? Why won't they accept common sense regulations?"
  Because common sense is a violation of their religion. Learn about Noahide laws. They want everyone interdependent and for that you have to destroy a rational functioning economy.
  The New World Order is the overt rule by whom has been covertly ruling for the last several centuries. When the Noahide laws become fully visible everyone will know and all the Christians will soon be dead. "World History" will be coming to peace loving N. America because its economic engine will no longer be needed.
 
Doug Plumb Added Jan 13, 2019 - 1:26pm
PTB just really do not like the common law and that is why they do what they do. Taking down the symbol of the common law, the USA, is vital. Its vital to destroy the USA armed forces and that is why 23 of their members commit suicide every day. Order them to shoot women and children then send them home.
Logical Man Added Jan 13, 2019 - 1:29pm
Common sense regulations help the common man, that's why they don't exist.
Doug Plumb Added Jan 13, 2019 - 2:36pm
The common law is built on common sense. Common sense is what everyone agrees on. Common law maxims are constructed from common sense.
Doug Plumb Added Jan 13, 2019 - 2:38pm
The Left has been deschooled from common sense and do not understand the West, only that it's bad because other people have more stuff than they do. Its purely economic. The common sense is being destroyed by Marxism.
George N Romey Added Jan 13, 2019 - 3:36pm
Actual tender in the system is far, far less than "money."  For the money masters money is key strokes that is conjured out of thin air.  It's no different than you waking up one day and realizing there's several billion sitting in your checking account.  Where did it come from?  Someone, somewhere decided you were worth such a largess.
 
We also live in a debt based society.  Under a fiat system money is created when loans are made.  In theory that sounds productive if loans are being used for productive purposes.  Today they are used mostly for things like buying back stock (which at one time it was illegal to borrow money to do such) or payday loans in which someone borrows money at 1200% to pay living expenses when their $13 an hour job can't.  This "same" money gets lent over and over creating outlandish profits. 
 
You have to give it to the money handlers.  They've found the most creative ways imaginable to use the huddled masses to make themselves insanely rich.  Of course if there is a hell, well let's just say they're all be there one day.
Mustafa Kemal Added Jan 13, 2019 - 4:06pm
Dave.
"I was under the impression that central banks were public institutions, "
 
Indeed, it is impressive  how long this charade can continue.
 
 
All roads to understanding what makes this world turn end up with the banksters 
 
 Doing God's work.
 
Mustafa
 
 
Logical Man Added Jan 13, 2019 - 4:12pm
George, add to that all the so-called wealth based on derivatives - all notional and based on promises on promises on promises - adding up to hundreds of trillions of nothing, in reality.
Unfortunately, IMHO, there's no hell for those guys to fall into, even though they richly deserve to end up in such a place.
Doug Plumb Added Jan 13, 2019 - 4:23pm
  There is an alternative way: Asset based money lets the government print money to pay government employees, they spend it into the economy. Taxation is inflation control.
  Under this system we have, government employees are not part of the economy, making the working economy more expensive PLUS we have to pay government employees out of our pockets as taxes.
  The difference is that the money floating around in the economy is not earning interest to be paid to dope dealers and pedophiles for letting us rent their money.
  The true cost of government services is simply not having them as part of the working economy, driving prices up on the private side.
  Under this system, fractional reserve banking would work as it always has but we wouldn't have wars except as being attacked by the money lenders to put the country back on interest bearing debt currency. All the morons of the world would be made to think we were terrorists and line up at army recruitment offices to kill us.
FacePalm Added Jan 13, 2019 - 5:17pm
Dave-
Actually, it wasn't Lincoln who came up with the idea of Greenbacks; that was Jefferson, to wit:
 
“If a nation can issue a bond it can issue a bill. The element that makes the bond good also makes the bill good. The difference between the bond and the bill is that the bond lets money brokers collect twice the amount of the bond plus interest. Whereas the bill pays nobody but those who contribute directly in some useful way. The people are the basis for the government credit. Why then cannot the people have the benefit of their own credit by receiving non interest bearing bonds? It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay: But one fattens the usurers and the other helps the people…”
~Thomas Jefferson
(you may recall from above that the FRB guys have a MUCH better deal than that; after "paying" a bit over 2 cents for a $1 bill to be created, they get "repaid" the $1 plus interest.)  Jefferson went on to warn:
 
"If the American people ever allow private banks to control the issue of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers conquered."
-Thomas Jefferson, letter to then Secretary of the Treasury, Albert Gallatin, 1802
(this has already happened, though few yet have awakened to it.)
 
Lincoln, however, was the first to implement gov't issued money and show that this worked to save the "vig" the banksters love to charge:
 
"The government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the government and the buying power of consumers. By adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity."
-- Abraham Lincoln(1809-1865) 16th US President
 
After Lincoln's assassination, the first item of business was to recall all the greenbacks - because the international bankers LOVED the "immense sums of interest" they could gather from ignorant people - still do - and they will stop at nothing at all to ensure their debt-system continues.  They have no interest whatsoever in freeing humanity; they LIKE having slaves.  In fact, that's the real reason why Britain freed their slaves before Americans did, because if you fully own slaves, you also have to give them housing, clothing, and food, at a minimum - turn them into WAGE-slaves, however, and they have to provide for THEMSELVES, which also keeps them(us) poor and willing to jump back on the hamster wheel each day.  "i owe, i owe, so it's off to work i go," right?  (BTW, JFK also tried to free us from the debt slavery by introducing the "silver certificates" which were US Treasury notes as opposed to FRN's; as the former were fully backed by silver, the bankster's had to get rid of JFK the same way they got rid of Lincoln - and guess what the first EO of LBJ concerned after he was sworn in?)
 
The reason i bring up greenbacks is that this principle is precisely what would(or could) get us off the slavery tax-farm plantations the globalist banksters have most of us on.  Even though many call to "abolish the Fed!," blaming IT for all America's troubles - as the Quigley cite should make clear, they are merely the agents/slaves of the commercial banks, and carry out their orders or else.  Eliminating or even severely regulating them would be a "hacking at the branches," not a striking at the root.
 
Eliminate their ability to create credit(which is debt), and the problem withers on the vine - or off it - because their ability to create debt via "loans" is their main weapon.  You may find it of interest to note(no pun intended) that during the explosion of the housing bubble, many knowledgeable people were able to take their foreclosure actions to court, and when the plaintiffs demanded proof that the banks had ANY of THEIR assets at risk, they were unable to do so, because the "borrowers" signature was what created the "credit."  IOW, the banks had "lent" nothing, therefore no "loan" existed, and those who'd been foreclosed upon were able to keep their homes.
 
You may find an investigation of the "monetizing debt" system to be interesting, too.  It could be said that they wave a magic wand over it and declare, "Presto!  This debt is now money!"  It's just another of many lies, though.
 
Here is the list of the banking interests which own shares of the FRB system, according to a source i have:
 
Rothschild Bank of London
Rothschild Bank of Berlin
FacePalm Added Jan 13, 2019 - 5:19pm
Warburg Bank of Hamburg
Warburg Bank of Amsterdam
Lazard Brothers of Paris
Israel Moses Seif Banks of Italy
Chase Manhattan Bank of New York
Goldman, Sachs of New York
Lehman Brothers of New York
Kuhn Loeb Bank of New York
 
There would be your breakdown of the percentages you mentioned earlier.  These are the "lenders"(deceivers) who own us, in effect.
Dave Volek Added Jan 13, 2019 - 5:50pm
Ward
 
I acknowledge that the Federal Reserve other central banks are not the same as the banks the public and business deals with. To me, central banks are kind of like capacitors in electrical circuits, they store and release money as needed, which means keeping a more consistent current. 
 
If I recall my economics course correctly, the wizards arranged things so that the deficit is manageable. Debt influenced this decision to the point of how much "Interest" is paid out, but the debt itself is not as important.
 
But don't ask me how they work this out. I was getting lost at this point. 
 
 
Dave Volek Added Jan 13, 2019 - 5:56pm
The Owl
I am not seeing much logic in your assessment. If these investment firms were outside the retail banks, then why not just let them fail? Why bail them out? Why would the retail banks be affected if the investment firms crashed? 
 
I think more entities were involved than fly-by-night investment firms.
 
Logical Man Added Jan 13, 2019 - 6:01pm
The function of banking is to enrich bankers. Everything else they do is just a way to ensure Joe Public goes along, be it by deception, propaganda, the corruption of government and the courts or, if things get really desperate, the use of force.
It's not that hard to understand.
Dave Volek Added Jan 13, 2019 - 6:09pm
Doug
 
You are getting into tinfoil hat territory. 
 
George
If I recall my economic course correctly, there are five different streams of money supply. Cash is the smallest one. One of the bigger ones is when a deposit is made into a bank and the bank has the charter to loan 10x (or more) that amount out. That is one way money gets created out of thin air. Don't ask me what the other three are, but I think they too are thin air. 
 
Money is a psychological value, not a physical value. Gold could be quite useless in a different world where it is quite plentiful. And remember the tulip crisis, circa 1600. Too many people put their value in tulips.
 
Mustafa
It is indeed a charade. When the psychological value of money disappears, things will fall apart rather quickly.
 
 
Logical Man Added Jan 13, 2019 - 6:16pm
DV, having spent about 25 - 30 years seriously researching banking and the history of money/finance, I don't think tinfoil has anything to do with it.
When you read enough history you start to see patterns.
 
 
Dave Volek Added Jan 13, 2019 - 6:19pm
FacePalm
It was interesting that USA tried twice to have its own independent currency. And it seemed to work OK (at least for the short term). I was impressed that Lincoln actually ran a war-time economy on it--and won the war! That system deserves some extra study. 
 
After the Civil War, USA had a few small economic crashes, which then convinced the legislators and public to be led by the central bank concept. However, the central banks have had their screwups, so that should be incentive to find an alternative.  
 
Mr. Still said that he believes in central banks, but they should be publicly owned and managed. Maybe the monetary branch of government could be set up like our judicial branch, given a lot of distance from the political machinations. I can see the TDG putting the right people in place to manage the economy, while letting the elected representatives make all he other decisions. 
Ward Tipton Added Jan 13, 2019 - 6:26pm
"But don't ask me how they work this out. I was getting lost at this point. " 
 
Easy: To their own advantage. 
 
"I think more entities were involved than fly-by-night investment firms."
 
Goldman Sachs, AIG ... not exactly fly by night organizations. The reason that they were bailed out was because the government had forced the original loans to be made, I believe through the Fair Housing Act under Clinton v1.0? Maybe back in 96 or 98 and the government had guaranteed these loans with taxpayer funding ... the politicians would have lost massive volumes of "campaign donations" and lobbying dollars. A look through the Dodd/Frank act also shows that government mandated that the CEOs of these organizations received their corporate bonuses from the taxpayer funding ... by law. 
 
There are major differences between the regulations for banking, trusts and even other financial institutions such as the Savings and Loans that were bailed out. The ability to control inflation and deflation means that all the major fluctuations were either caused by incompetence on the part of the banksters in charge or were intentional ... either way it is troublesome that a mere "oops" ... much less an intentional effort, can adversely impact the global financial system to the point where wars ensue. 
 
Unconstitutional, extra-judicial activities one and all ... tinfoil hat? 
 
If you think it is bad now, wait until you begin developing a more complete understanding of the realities of the debt based economic and financial systems ... though it seems you are making great progress to date. 
Mustafa Kemal Added Jan 13, 2019 - 6:29pm
Dave,
the "charade" i was referring to is the idea that the Fed is a Federal institution.
 
Once one understands that this system is not run by "us" your questions of economics matter little.  
 
Moreover,  Antony Sutton in his books
Wall Street and the Bolsheviks and Wall Street and the Rise of Hitler
gives hard evidence to the banksters contribiutions, illegal contributions through out state department BTW, to these events.
 
Moreover, reading  Tooze's The Deluge, his analysis of the Versaille treaty makes clear the bankster's roles in that disaster and the one that followed. 
 
War is expensive, and someone has to pay the debts!
The debts the Europeans could not pay back to JPMorgan were payed for by the US taxpayers via gifts to them, which they instantly used to pay their debts to Morgan.
 
Your tinfoil hat jokes make me laugh -the idea that there is a not a conspiracy LOL
 
Mustafa
Logical Man Added Jan 13, 2019 - 6:34pm
DV, do you really believe that the judiciary is distant from political machinations?
 
Public ownership of banks would mean the profits from banking went to the majority, not a tiny minority. Given it is people who ultimately back a currency, surely that's how it should be if we have to have central banks. Giving the power to produce 'money' from thin air to a small, privileged group is bound to lead to corruption and exploitation.
 
Ward Tipton Added Jan 13, 2019 - 6:36pm
"Moreover,  Antony Sutton in his books
Wall Street and the Bolsheviks and Wall Street and the Rise of Hitler
gives hard evidence to the banksters contribiutions, illegal contributions through out state department BTW, to these events."
 
Why we were so concerned about Nazi Germany that we still had German cargo ships legally loading steel for their war efforts in NY Harbor when Japan attacked Pearl Harbor ... in an attack that they knew was coming and that had been the direct result of burdensome tariffs and the oil embargo against Japan. Want to guess the sources for those actions? And the benefitting parties? 
Logical Man Added Jan 13, 2019 - 7:20pm
Money as Debt
worth 45 minutes of anyone's time who wants to understand money.
 
Doug Plumb Added Jan 13, 2019 - 9:09pm
Almost anything called "Tin Foil Hat Theory" is close to the truth. An important member of the CIA once said "Once every single thing the average American believes is wrong, our disinformation plan will be complete". I forget who it was.
You should read "Silent Weapons For Silent Wars" and the "Report From Iron Mountain". In government and think tank writings you will discover that the tin foil hatters like me have been right all along. We are the only ones that read government and think tank papers, and the ancient thinkers. We are not confused at all, just wondering why so many others are and we forget the amount of time we have spent to learn all of this.
Doug Plumb Added Jan 13, 2019 - 9:10pm
Ward, the mainstream/establishment wants us to think its always a little guy who picks on the big bully first. You have to believe that if you believe American policy as stated on Tee Vee.
Doug Plumb Added Jan 13, 2019 - 9:12pm
re "Your tinfoil hat jokes make me laugh -the idea that there is a not a conspiracy LOL"
 
Me too.
FacePalm Added Jan 13, 2019 - 10:43pm
"It is also important for the State to inculcate in its subjects an aversion to any outcropping of what is now called 'a conspiracy theory of history.' For a search for 'conspiracies,' as misguided as the results often are, means a search for motives, and an attribution of individual responsibility for the historical misdeeds of ruling elites. If, however, any tyranny or venality, or aggressive war imposed by the State was brought about not by particular State rulers but by mysterious and arcane 'social forces,' or by the imperfect state of the world -- or if, in some way, everyone was guilty -- then there is no point in anyone's becoming indignant or rising up against such misdeeds. Furthermore, a discrediting of 'conspiracy theories' will make the subjects more likely to believe the 'general welfare' reasons that are invariably put forth by the modern State for engaging in aggressive actions."
-- Murray N. Rothbard(1926-1995) Dean of the Austrian School of Economics
Source: For a New Liberty (New York: Macmillan, 1973), p. 6
 
The term "conspiracy nut" entered the lexicon ca 1964, as a CIA psyop to discourage anyone from examining the JFK assassination too closely.  Worked, too; those who were made uncomfortable by actually thinking found it WAY easier to just label the truth seekers, laugh at them, and move on.
 
With Trump's partial release of JFK papers that were only supposed to be sealed for 50 years(instead of 65), the bullethole in the windshield forever proves the "lone gunman" theory to have always been utter bullshit perpetrated by deep state agents, who remain a "clear and present danger" to this very day.
 
Here's how i look at it: when it comes to human history, there are only two viable theories, a) things happen by accident, or b) things happen on purpose.  i lean heavily toward b), and most people do, i daresay, for anyone who thinks about these things.  FDR said "In politics, if it happens, you can bet it was planned that way," and he was right. 
 
Consider the fact that there are WAY more conspiracies than "accidents," and you'll be on the right path to breaking the programming.  Want to guess how many surprise parties are planned every day?  There's a benign example of a conspiracy, though most of them are much more malign.  Anyone planning any act of war - or any premeditated crime - is conspiring in secret with others for something to happen to someone or lots of someones, isn't he?  A football team comes up with a secret game plan, and yep, that, too is a conspiracy.
 
Ever see this?  Ol' George laid it out, clear and plain...
Dave Volek Added Jan 13, 2019 - 11:55pm
It is always interesting to see how WB threads take their twists and turns. We have gone a little adrift onto conspiracy theories, and maybe someone  here should one of their comments and turn into a full WB article.
 
I like FP's analogy that a football team with a new game plan could also be construed as a conspiracy. In my days in party politics, I would say that there were more than a few ambitious people who wanted to create their own conspiracy theory; they had great plans to shape events within internal party elections. But they were unsuccessful. They just couldn't pull off what they wanted to pull off--despite a massive investment of time, money, and manipulations. Trying to bring people into the "conspiracy" and keep them quiet, plus confront those who openly oppose you, and all the clashes of egos. Nope, just too hard from what I saw. Most players are reactive, not proactive. Events just don't shape up according to anyone's plan. 
 
My take is that 10% of conspiracy theories are true. But it would take too much time for me to investigate them all.
 
The reasons for the 2008 recession, as I understand it (even before I watched the documentary) is that sound banking rules were bent so some people could make a profit. I suspect the people that were managing the economy believed they could grant this favor and still manage the economy. Didn't work out. 
 
I think Mr. Still makes a compelling argument in that his documentary had about 30 vignettes that pointed to the less-than-altruistic intentions of central banks. If there were five or less, I would not have paid attention to what he was saying. But 30! Hmmmm. Maybe there is some dirt under the rug.
 
Another good sign is when there appears to be a coverup--and the authorities are not forthcoming. In his documentary, Mr. Still made another astonishing claim: "There ain't no gold in Fort Knox." This conspiracy theory could be discarded simply by proving there is gold in Fort Knox. But it seems no one wants to open the doors of the vault. Hmmmmm.
 
Rather than get to the absolute truth behind all these conspiracies, I would prefer building a system of governance that would generate a lot fewer conspiracies. If anything, Mr. Still has me thinking about how the TDG could structure its own central bank. The current arrangement is not working out that well. 
 
 
 
 
 
Dave Volek Added Jan 14, 2019 - 12:03am
Face Palm
 
I went to the George Carlin video. I don't fully agree with it, but there is definitely enough truth there.
 
It seems strange that I offer an alternative, and no one wants to investigate it. Americans seem quite content to vote D or R, then complain like hell after. I can't explain it. Can you? 
 
I'm coming to conclusion that I need to put this TDG project away for a few more years.
 
 
FacePalm Added Jan 14, 2019 - 12:24am
Well, you might just want to consider re-naming it.  To anyone with knowledge of American history and the debates regarding the ratification of the Constitution, the term "democracy" - especially as related to world government - is a non-starter...if one adds in the truth that the Soviets and others were gung-ho to start "democratic revolutions" all over the place to get their socialist nightmare tyrannies afloat.
 
Apologies for the tangent, but i did want to make clear that simply dismissing an argument because it may SOUND like a "conspiracy theory" is rarely true.  i understand it's a PITA to investigate ALL claims, but when i hear one i don't cotton to - like the earth is flat - i say "present the convincing evidence," and put the burden where it belongs, on the claimant.
 
As to the monetary conspiracies which have ruled the planet nxs of 400 years, i think that you're learning enough to follow that thread and unravel the whole thing - just be careful as to whom you speak to about it, e.g.:
 
 "Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they better not speak above their breath when they speak in condemnation of it."
- Woodrow Wilson, The New Freedom (1913) 
Ward Tipton Added Jan 14, 2019 - 12:36am
""There ain't no gold in Fort Knox." This conspiracy theory could be discarded simply by proving there is gold in Fort Knox. But it seems no one wants to open the doors of the vault. Hmmmmm."
 
The Little Alamo ... the gold vault in Fort Knox has been little more than a location for offices of political liaisons since at least the early eighties. Most gold is kept in Federal Reserve Banks. 
Ward Tipton Added Jan 14, 2019 - 12:41am
In regards to offering alternatives, I would not expect the existing governments to relinquish powers so easily. In the USA, even getting a third party into the debates requires more than five percent of registered voters to support them, while at the same time, the media refuses to give them coverage and the meme goes on about any third party vote being a wasted vote ... add in the fact that it takes hundreds of thousand of dollars even in localized elections and they have the system pretty well wrapped up. This was why in our efforts to introduce alternative systems, we have focused largely on sovereign or semi-sovereign native, indigenous and aboriginal peoples, though some African nations and some South and Central Americans are open to change if they can see a working model as well. 
George N Romey Added Jan 14, 2019 - 8:00am
Among conspiracy theories there's generally some nuggets of truth.  All is never as it seems and the sheep are easily fooled.  No one has ever officially investigated what QE was all about and how is it that the banks went from being on the verge of bankruptcy to six months later again banging out quarterly billion dollar profits.  This does not happen naturally in a business cycle.  Only with artificial (and criminal) help could such a feat happen.  Yet do you ever hear one politician or one media reporter (other than on alternative media) question how this happened?
 
I'd believe the conspiracy theorists over the mainstream sources any day of the week.
Mustafa Kemal Added Jan 14, 2019 - 9:56am
Dave,
"My take is that 10% of conspiracy theories are true. But it would take too much time for me to investigate them all."
 
No need to investigate them all. How about these?
 
Gulf of Tonkin
Sinking of Luisitania
USS Maine
 
Is 10% of those are true?
 
For a lot longer list, see
False flags
 
 
Mustafa
Dave Volek Added Jan 14, 2019 - 10:29am
FacePalm
 
Another reason for not pursuing conspiracy theories too enthusiastically is the amount of time expended for so little results. There's a lot of work to keeping these stories alive.
 
And even if conclusively proven true, so what? 
 
For example, we could prove the JFK was indeed assassinated by anti-Castro Cubans. What are we going to do differently after we realize this fact? 
 
Getting back to this thread, most of the public already believe there is something fishy about our banking system. But we can't seem to turn this into a political force to effect change. 
 
As various entities vie and compete for power, western democracies leave the door wide open for all sorts of conspiracies, real and imagined. 
 
We need a system of governance where elected representatives are more interested in the society they govern than on their own status, power, and influence. Then there will a lot fewer conspiracies. 
 
 
 
 
George N Romey Added Jan 14, 2019 - 10:35am
Dave as long as people decamp into the 2 political parties the existing banking system will never change because both parties strongly support it.  Again, what I asked above about how did within six months our banking system go from total failure back to making billion dollar quarterly profits?  A six month period that straddled both political parties and two Presidents?
 
As long as this moronic argument goes on about whether Trump is a hero or a villain (he's neither, he's a nobody in the grand scheme of things) the true villains (large money center banks and their owned central banks) will remain at large.
Dave Volek Added Jan 14, 2019 - 10:43am
Ward
 
Last week, the province of British Columbia had its third referendum to replace its Westminster electoral system with a European electoral system. BC has had a long history of its legislature not reflecting the popular vote very well, but this imbalance has happened a lot elsewhere in Canada. The referendum failed--again.
 
I can't figure this out: people complain like hell, then are offered a change to address their complaints, then refuse the change. 
 
The TDG need only 1% (or maybe less) of the population to start it off. Chapter 6 explains how this 1% will grow the TDG  into something bigger, and it does not need a lot of money. But it does require the people to get off their butt and do something other than complaining or wishing. 
 
When I saw the investment of time in the Trump and Clinton rallies, I could only shake my head: if the TDG had 1% of that energy, it would be built in a decade. The energy put into conspiracy theories is also not all that productive. 
 
Maybe a good conspiracy theory is that the nebulous powers proffer up these conspiracies to keep our mind off what is really wrong.
 
Dave Volek Added Jan 14, 2019 - 10:55am
George
 
Yep, I have to agree with the nugget of truth. 
 
But where should I put my time: chasing down the facts of the conspiracies to later help prove it is true OR build a system where such conspiracies are to be a lot less likely? 
 
 
Dave Volek Added Jan 14, 2019 - 10:56am
Mustafa
 
I went to the link and read about the sinking of the USS Maine. It is possible that a US agent deliberately set the explosion, but it was fairly common for boilers of those times to explode. A 19th-century boiler next to a magazine was a safety hazard. I would wager that the political establishment just used the accident to its best advantage. 
 
So where should I put my time? Chasing down all these conspiracies to get the facts and later preach them to the internet? What good will that do? Or should I put my time into a new kind of system? 
Ward Tipton Added Jan 14, 2019 - 11:07am
Dave? Did you see my recommendations for implementation above? We have been very successful in the promotion of the ideas, with people who are in a position to see to it that it does happen. However, we have to fund the first one as well. I do not know your system, but from what I am guessing from your comments, I doubt it has sufficient checks on government for my taste ... which I have addressed how we managed to circumvent that as well. 
 
As for one percent? If you believe that the government in power will relinquish that power or allow for any threat to that power, merely based on a singular percentage of the population ... well ... the battle would be fierce to say the least ... figuratively at least, if not literally. Government will never willfully allow for anything that even hints at diminishing its power and control. 
Ward Tipton Added Jan 14, 2019 - 11:10am
"Maybe a good conspiracy theory is that the nebulous powers proffer up these conspiracies to keep our mind off what is really wrong."
 
See the Hegelian Dialectic - Government creates a problem, generally through "well-intentioned" programs that no "decent people" would contest ... which creates a bigger problem, forcing government to come in and create more bureaucracy with more power and control and budgets to "fix" the problem they created to begin with ... and creating other problems in the process so that the cycles can be rinsed and repeated. Government is neither an ally nor a friend ... to paraphrase ... like fire, a dangerous servant and a merciless master. 
rycK the JFK Democrat Added Jan 14, 2019 - 12:06pm
That sounds like our former Prez and the Dems in Congress!
 
SS, HUD, Great Society, ObamaCare, welfare, open borders, high taxes.
rycK the JFK Democrat Added Jan 14, 2019 - 12:14pm
Ward Tipton
 
"Government will never willfully allow for anything that even hints at diminishing its power and control. "
 
A case that fits this point is: the FBI that struggled to
[1]  protect the next Dem president,
[2] attempt to dethrone the newly elected POTUS,
[3] attempted to prove collusion with Russia, 
[4] lied under oath, deleted evidence and whined. 
 
This is typical. I cannot find a case where the secret police of any country was not packed to the gunwales with loyal stooges. Any of these: FBI, NKVD, Stasi, Gestapo, KGB..... are controlled by the current leader. 
 
But,  President Trump may get his turn to set up actions against Hillary and Billy, perhaps Nancy and Chuckles and more. Prison doors may close on some of our 'elected officials.'
Mustafa Kemal Added Jan 14, 2019 - 12:58pm
Dave
"So where should I put my time? Chasing down all these conspiracies to get the facts and later preach them to the internet? What good will that do? 
 
No preaching is needed, thank you. We have enough of that already. 
 
You dont need to chase down anything, but ignoring them and denigrating them as conspiracies implies a certain willful ignorance, IMO, which certainly will not produce the desired effect.
 
As for 
 Or should I put my time into a new kind of system? ''
 
I think that is a very good idea -but that system will have to acknowledge realities on the ground, realities that make much of classical economics and governance irrelevant.  
 
Similarly, if you want to come up with political theories that will facilitate a peaceful coexistence and one ignores the realities of the MIC influence on power, then it will be flawed.
 
For example, if you ignore citizens united and expect elections to be a contributing factor to  a representative republic, you have ignored the realities of who our congress listens to. Likewise, if you neglect that the FED is not run by the US, then questions of its relationship to an american economics system as a closed system is flawed.
 
Mustafa
rycK the JFK Democrat Added Jan 14, 2019 - 2:13pm
" Likewise, if you neglect that the FED is not run by the US, then questions of its relationship to an american economics system as a closed system is flawed."
 
So, who runs the Fed if not the Fed Board??
 
 Please do not return a flawed response or a cliche.
George N Romey Added Jan 14, 2019 - 2:25pm
New systems do not get built until old systems completely breakdown and no longer benefit those that are benefiting the most.  In other words the .01% would suffer.   But as the .01% would suffer the lower 90% would go through hell.
 
At the end of the day man can be dumber than the animals around him.
Dave Volek Added Jan 14, 2019 - 3:51pm
Mustafa
 
I see your point on conspiracy theories. There is no use in making enemies. And sometimes the theories are right.
 
I'm not sure if you understand that the TDG is not just another political party. It will be built outside the current system and mostly by volunteer time. There will no MIC or central banks to shape it into their tool. If the early builders put in the right culture (which my book describes in detail), it will be difficult for such nefarious forces to take over when the TDG becomes more of a social force.
 
For example, the foundation of the TDG is the neighborhoods, which are electoral units from 50 to 500 people in the same geographical area. The residents have opportunity to know each other. And in their annual elections, should be able to select from among their best people for governance to represent them. It will be extremely hard for any political party or nefarious force to put their toadstool in place. Or perhaps better said, if the nefarious forces want influence in the broader TDG, they will have find toadstools in many, many neighborhoods. How can they put in their own toadstool in so many electoral units such that the neighbors will not recognize that the toadstools for what they really are.
 
Here are a couple of other checks-and-balances of TDG. If an elected representative fails to generate the confidence of the neighbors, the neighbors will elect someone else in the next annual election. And all residents are eligible to be voted for: there is no nominations and ballots are in a write-in format. And an elected representative must be resident of the neighborhood (no parachuting). There are many more, but I shall stop now.
 
The current electoral rules in western democracies serve the interests of the political parties and the nefarious forces that back the parties much better than they serve the citizens. The TDG will turn that around.
 
Dave Volek Added Jan 14, 2019 - 3:59pm
George
 
There is a lot of historical truth to what you have just said.  Unfortunately revolutions that require a violent overthrow usually do not turn out much better than the system they replaced.
 
I am hoping that the evolution of the TDG does not go down a similar path. And I would even say that it can't.
 
Fortunately western democracies have "freedom of association". There really is nothing stopping a small minority of citizens to organize themselves into a new political party or (better) into the TDG. If we have a more violent revolution, the rules are likely to change such that it would be dangerous for citizens to participate in this way.
 
Logical Man Added Jan 14, 2019 - 6:06pm
Dave Volek Added Jan 14, 2019 - 6:18pm
Thanks LM
 
That was an interesting list and sure broadened my definition of what constitutes a "conspiracy." There were a few Canadian examples, and I could quickly come up with a few more. 
 
We should applaud those who fight to get the truth out. 
 
But my preference is to work towards a system of government where conspiracies are less likely.
Logical Man Added Jan 14, 2019 - 6:51pm
I'd agree. All we need is transparency in both government and banking. When everything is secret, people fill in the blanks to try to figure out what's going on. Those that get it right are then ridiculed by the use of the term 'conspiracy theorist'.
Ever hear of COMER and the lawsuit brought against the Canadian Government?
Having attended quite a few of their events and discussed the issues with the lawyer involved, it was quite an educational process, in many ways.
The courts always side with the establishment is one of the big messages from how this all played out.
Dave Volek Added Jan 14, 2019 - 7:26pm
LM
 
I think they are labelled conspiracy theorist while they are in the fight. When proven right, they are more regarded as a social warrior.
 
The trouble is that there are so many unproven conspiracy theories out there. It is hard to sift through them all. And I like to focus on the future, not the past.
 
I never heard of COMER before. But I went to their website. I will send them a letter introducing the TDG to them. Thanks for the lead.
 
I don't think even the TDG will get full transparency. I have served on several boards and sometimes we have had to deal with issues that would be better to keep out of the realm of public awareness. However, we still had tough decisions to make, and I think we made the best decision. And I didn't see any nefarious motives involved. But these were small organizations. 
 
The goal should be to put competent and honest people in charge of these decisions. Then there will be less questioning of when a contrary decision is made--and eventually gets turned into a conspiracy.
 
 
Logical Man Added Jan 14, 2019 - 8:44pm
Competent and honest people!
About the exact opposite of what we have in place now.
Ward Tipton Added Jan 14, 2019 - 8:51pm
"Competent and honest people!
About the exact opposite of what we have in place now."
 
And generally not the kind of people who win elections. People talk so conveniently about the truth, when in reality they prefer to be lied to. 
 
(Oversimplified) Example: 
 
"Honey, does this dress make my bottom look fat?"
 
"No baby, your fat arse makes your arse look fat!" 
 
Not generally the answer they want, even if it is the truth. 
 
 
Logical Man Added Jan 14, 2019 - 8:58pm
DV, COMER is pretty much done. William Krehm, who started the whole thing off (interesting man) was 105 years old last November and doesn't have much fight left in him. The organization devolved into a shambles and the lawsuit was thrown out. The Judiciary didn't want to hear about it. COMER Appeal
Trying to argue law with government is difficult as all lawyers are constrained by the choke chain that is their license to practice law.
Logical Man Added Jan 14, 2019 - 9:07pm
Nice example, Ward!
The Owl Added Jan 14, 2019 - 9:16pm
My argument, Dave, is that more of the investment banks and insurance companies SHOULD HAVE BEEN ALLOWED TO FAIL.
 
The problem was a significant portion of the rest of the finance industry, including retail banks, had gotten into the derivative securities gambling game.  A failure at the cores of the sectors, like with Lehman Brothers and American Insurance Group (AIG - the re-insurer that had the most risk laid off) would strip "performing assets" from the books of many of the retail banks that had arms heavily involved in high-risk trading.  The stripping off of those assets would likely have put those retail banks into illiquid positions with no assets to pledge to the Federal Reserve so that they remain in operations.
 
Enter TARP...The Troubled Asset Relief Program where the US government dumped, initially $700 billion into rescuing...and liquidating...non-performing assets, the highest amount of which went to AIG to buy out the underwater credit-default-swaps portfolio which was pretty much worthless.  Without the credit default swap insurance to bail out the ill-advised investments of the rest of the financial sector, that sector would have been bankrupt if AIG had not been able to pay out on the losses.
 
 
Dave Volek Added Jan 14, 2019 - 9:28pm
LM/Ward
 
My six years in party politics is that sooner than later, a politician is forced into compromising his or her principles---if the goal is to be elected or remain elected. Until we change the system, we have to live with this natural law of western democracy.
 
Too bad about COMER. My brief reading of their website shows a well thought out approach, relying more on logic than emotion to make their points.
Dave Volek Added Jan 14, 2019 - 9:35pm
The Owl
 
Your recent post is getting into knowledge I'm not too familiar with. So I shall refrain from commenting directly.
 
1) If I as an investor, play the derivatives market and lose my shirt, there is no bailout for me. So why should a bank get a bailout for making similar risky moves?
 
2) If the investment bank depositors and investors were mostly wealthy people who should have known better, all the more reason not to offer a bailout.
 
3) I'm not an economist, but I'm sure USA had enough banks that were solvent enough to withstand the crash. I doubt the whole system would have collapsed without the bailout.
 
 
FacePalm Added Jan 14, 2019 - 10:08pm
rycK-
So, who runs the Fed if not the Fed Board??
 
 Please do not return a flawed response or a cliche.  

 
Asked and answered: see my 2 posts, above, from Jan 13th, 5:17PM, near the end of one and finishing with the next.
 
To be direct, 68% of the ownership of the Fed is unincorporated commercial banks headquartered in Basel, Switzerland, and the remaining 32% American allies who betrayed Americans.
 
This information should be important to Dave V, for if he wishes to see a new governmental system implemented, he's going to want to know whom are the key pullers-of-strings from behind the scenes, the ones who START, fund, and maintain many "secret societies," like Disraeli references:
 
"The governments of the present day have to deal not merely with other governments, with emperors, kings and ministers, but also with the secret societies which have everywhere their unscrupulous agents, and can at the last moment upset all the governments' plans."
- British Prime Minister Benjamin Disraeli, 1876
 
Naivete has ruined many a good plan, is what i'm saying.
Ward Tipton Added Jan 15, 2019 - 7:59am
1) If I as an investor, play the derivatives market and lose my shirt, there is no bailout for me. So why should a bank get a bailout for making similar risky moves?
 
Because it was based on the Fair Housing Act and Dodd Frank Bill which was government forcing banks to make loans that they knew would never be paid back. These same statutory laws also mandated CEO pensions under the penalty of law if a CEO refused their pension ... cannot remember which Financial Institution tried to test that but lost ... any time government gets into the picture beyond ensuring a level playing field, they inevitably create government (arbitrarily selected ... based on who has the more powerful and richest lobbyists) elected winners and losers in private industry ... as is almost always the case, the taxpayers were the real losers. 
 
2) If the investment bank depositors and investors were mostly wealthy people who should have known better, all the more reason not to offer a bailout.
 
It was mandated by law. These wealthy investors buy and sell the politicians like so many political commodities in an effort to create their own laws, prevent competition and make themselves rich. 
 
3) I'm not an economist, but I'm sure USA had enough banks that were solvent enough to withstand the crash. I doubt the whole system would have collapsed without the bailout.
 
You need to differentiate between Banks, Trusts, Financial Institutions like Savings and Loans ... the primary bailouts were not given directly to banks, as that is generally done through the central banking system and the federal reserve trust, but the Savings and Loans which are more specific financial institutions. 
FacePalm Added Jan 15, 2019 - 8:26am
Ward-
So why should a bank get a bailout for making similar risky moves?
 
Part of their corporate legal strategy has always been to privatize profits, but insure against losses by "outsourcing" them - in these instances, on "the government," meaning the taxpayers.  But i'm sure you're already hip.
 
It's not fair, just, or right, but it's "legal."  "The Law is a ass," you know.
 
"Repeal the entire Banking Act of 1933, and Austrian School economists will cheer, especially if the current system were replaced by a 100%-reserve competitive banking with no central bank. That banking reform would give us a sound money system, meaning no more business cycle, bailouts, or inflation."
-- Lew Rockwell[Llewellyn H. Rockwell, Jr.] (1944- ) Chairman of the Ludwig von Mises Institute
Source: Banks on the Dole, THE FREE MARKET, November 1995.
 
"Farce, gross incompetence, and tragedy is the hallmark of big centralized government, wherever it develops. Big centralized government has developed in the United States year after year since the 1930s, and it has both solidified and metastasized since 9-11. Today, we live at the will and by the grace of a dystopian and grasping government. There is not an exceptional amount of time left before this government collapses, but before it does, we the people will suffer far more than we have suffered to date. Banking collapses, mortgage fraud at the highest levels, government bailouts, currency printing, and inflation in food and energy are just a foretaste of the future, led by the same Washington public-private cartel we have suffered for decades. . . .I believe our government -- outdated, unrestrained by the Constitution and soon to default on every debt it has taken on in our name -- cannot long endure. But unlike those who run and benefit from our modern American nationalism, corporatism and socialism, I do not fear average Americans seeking self-government, rule of law and liberty.
That's why on Sept. 11, I will not be celebrating America's undeclared wars on countries that had nothing to do with the Sept. 11 attacks 10 years ago. I will not be attending remembrances of victims of that day, because those remembrances refuse to count American liberty, rule of law and freedom of trade and movement uppermost on that list of the sacrificed. I will not attend any program offered by a religious or political organization that seeks to ride a federal government bandwagon to confirm some imperative of war against Islam halfway around the world, or that seeks to promote the false concept of a culture war as somehow God's intent for America.
On this 10-year anniversary, I intend to go about my business as usual, and say a prayer of gratitude for the small freedoms I have left. In the afternoon, I'll be in Charlottesville, Va., learning about local apprenticeship and crafts demonstrations. In the evening, I'll check the livestock and gather the eggs. I won't allow what I personally experienced that day in the Pentagon, nor the subsequent government drumbeats for war, waving the Sept. 11 banner, to diminish my awareness of the meaning of liberty.
The real battle for Americans today is a battle to reassert our independence from an overbearing and unsustainable state. Today, we can all celebrate that there are fundamental cracks in the federal state's veneer, and we can be grateful for the options we still have in our own lives to live free, to practice charity and faith, creativity and productivity and to rediscover our own power as individuals and communities."
-- Karen Kwiatkowski(1960-) retired U.S. Air Force Lieutenant Colonel, included duties as Pentagon desk officer and a variety of roles for the National Security Agency, author, columnist, 9 Sep 2011
 
i don't think there's really a need to differentiate between various forms of banking; all have one common flaw - they rely on debt notes and "banking rules" to govern their operations, which are mostly a great Fraud and humbug.
 
 
Ward Tipton Added Jan 15, 2019 - 9:41am
"i don't think there's really a need to differentiate between various forms of banking; all have one common flaw - they rely on debt notes and "banking rules" to govern their operations, which are mostly a great Fraud and humbug."
 
True enough in its own right, but when discussing the bailout of the S&L in particular, it helps to refer to them as such, and not to refer to them as banks, making an already difficult and often confusing issue even more convoluted. A writer's bane perhaps, but semantics ... because words matter. 
 
Natural law is good ... statutory and prohibitive law ... questionable ... though granted, perhaps necessary, particularly in larger urban population centers. 
Dave Volek Added Jan 15, 2019 - 11:26am
2) If the investment bank depositors and investors were mostly wealthy people who should have known better, all the more reason not to offer a bailout.
 
It was mandated by law. These wealthy investors buy and sell the politicians like so many political commodities in an effort to create their own laws, prevent competition and make themselves rich. 
 
I find this very alarming.
 
We had a couple of Alberta-based "banks" fail about 30 years. The depositors got a minimal reimbursement based on Canadian law, but I think that was limited to $60,000. Anything over that was lost.
 
These two banks were outside the "big 5" banks and were "upstarts", so I would say that depositors should have used a little caution. But they were attracted to a half or full point of extra interest revenue--and put their eggs in one basket. I have trouble feeling sorry for this kind of investor.
 
The media kind of blamed the banks for reckless lending, but maybe there was more to it than that. Maybe I should do some research.
 
----
 
As for the TDG, reforming central banks is not going to be one of its main objectives in the early stages. The early builders will have enough challenge getting used to the new electoral process and developing a consultative culture.
 
But as the TDG grows and readies itself to replace western democracy, it may want to strike a committee composed of knowledgeable individuals to craft an alternative arrangement for central banking.
 
 
 
 
 
 
George N Romey Added Jan 15, 2019 - 11:44am
The issue is that all banks go out borrow money in the overnight market.  If that market freezes up suddenly the banking sector fails because no one is willing to roll those loans over each day and instead demand either full repayment or if secured the collateral.  This is the issue.  The system is highly leveraged and depends upon fractional banking.  It's always one step away from a total and utter collapse that can be had within days.
 
The only way to get rid of this disaster waiting to happen is to abolish the Fed, go back to a gold back currency, reduce fractional banking and leverage in the system.  However, banks would go back to boring institutions making just ordinary profits (and no multi million dollar bonuses for the fat cats).  This genie is out of the bottle and no one can put it back unless the system one days sees a 1929, or far worse, crash.  
rycK the JFK Democrat Added Jan 15, 2019 - 12:10pm
GNR
 
"The issue is that all banks go out borrow money in the overnight market.  If that market freezes up suddenly the banking sector fails because no one is willing to roll those loans over each day and instead demand either full repayment or if secured the collateral.  "
 
That happened in 2008 as LIBOR  rates went from about %0.15 to about %7.o meaning there was no bank willing to loan. 
 
"The only way to get rid of this disaster waiting to happen is to abolish the Fed, go back to a gold back currency, reduce fractional banking and leverage in the system"
 
 Gold back currencies failed in the 1920s and beyond until the US got out in 1971. Full reserve banking has major problems so nobody has used that since about 1705.
 
There are no good alternatives. 
Dave Volek Added Jan 15, 2019 - 12:25pm
George / Ryck
 
Mr. Still also did not recommend returning to the gold standard. I couldn't quite follow his reasoning.
 
But he also mentioned that twice US Government issued its own currency and managed the supply of that currency so that struck a balance between business being able to transact and minimal inflation. These currencies weren't backed by anything except the psychological value put on them by the public. The currencies seemed to work, at least in the short term. But somehow the central bankers got a toehold and later both feet in the door.
 
 
FacePalm Added Jan 15, 2019 - 12:53pm
Ward-
"Honey, does this dress make my bottom look fat?"
 
"No baby, your fat arse makes your arse look fat!" 
 
Not generally the answer they want, even if it is the truth.

++++++++++++++++++
Off topic, but i've read that when women ask that question(or anything similar), it's coded language for "i'd like to talk about fashion."
 
But "Darlin', your ass looks great no matter what you're wearing - or not" is a much more diplomatic answer, especially if you hope to tap it, later.  If you don't, it doesn't matter much, i suppose, especially if you already hate her for something else...like you HATE talking about fashion...
Ward Tipton Added Jan 15, 2019 - 1:04pm
"It was mandated by law. These wealthy investors buy and sell the politicians like so many political commodities in an effort to create their own laws, prevent competition and make themselves rich. 
 
I find this very alarming."
 
Wait til TDG starts making inroads and you become the target of their wrath. 
rycK the JFK Democrat Added Jan 15, 2019 - 1:50pm
Dave
 
"But he also mentioned that twice US Government issued its own currency and managed the supply of that currency so that struck a balance between business being able to transact and minimal inflation. These currencies weren't backed by anything except the psychological value put on them by the public. The currencies seemed to work, at least in the short term. But somehow the central bankers got a toehold and later both feet in the door."
 
[1] All world currencies based on metals vanished in the 1920s or before due  to too much paper printing such that it was profitable to exchange paper for gold or silver.
 
[2] Correct, paper was based on nothing hence inflation sets in. Lincoln issued greenbacks in the 1860s and gold soared from less than 20/oz to $48. This was an inflation effect. 
 
[3] Nixon had to dump the Bretton Woods Agreement since he printed  too much paper and France  threatened  to exchange their lot for gold.
 
[4] Metal backed currencies all started off at about %60 of the   paper in the last few centuries and  wars forced inflation so the backing had to go away. All currencies float now. 
 
[5] There is not enough gold to back our currency
 
"While 8,133.5 metric tons of gold sounds like a lot, it's not when viewed from a more personal context. For example, there are 32,150 Troy ounces in one metric ton, meaning America has roughly 261.5 million Troy ounces of gold in reserve. For perspective, the country's total population is 319 million, so that's less than an ounce per person. Though if we exclude the kids, we have enough gold in reserve so that every adult can have about 1 ounce apiece."--https://www.fool.com/investing/2017/01/31/6-gold-statistics-that-will-blow-you-away.aspx
 
1 Troy oz is worth $1287.90 at this moment. There is no way some $1300 x 319 million can back the dollar. 
Dave Volek Added Jan 15, 2019 - 1:50pm
Ward
 
If that happens, I fully expect that I will be put on a watch list and be electronically surveilled. I may not be allowed to cross the Canada/US border. And if I do cross, I just might arrested for treason. Even assassination is possible. I have accepted these as possible outcomes.
 
And when we reach this state, the TDG will be too widespread to contain. THEY could make life difficult for me, but the movement will have already started growing.
 
But that outcome seems not to be in the making. There is such a sense of hopelessness that I cannot revive. I'm considering putting the TDG on the shelf and try again in five years.
 
Phoenix Added Jan 15, 2019 - 2:46pm
You left out the Community Reinvestment Act. That LAW is what forced banks to lend to people (sub-prime) that were poor credit risks. Once the banks understood that Fannie Mae would buy up any of their investments (bundled together loans), that's when greed overtook sense. Remember that the head of Fannie committed suicide during this time, and W tried several times, to warn Congress of the approaching doom. Congress did nothing. 
 
So, in the case of America, it's not about some giant central bank, but about bad laws, first and foremost. 
 
Do some more research into the CRA. Then you'll understand what happened to the stock market. 
 
Dave Volek Added Jan 15, 2019 - 3:36pm
ryck
 
Nice math. And that assumes the gold is really in place, which it may not be.
 
 
 
Phoenix
The 2008 crash was a complicated topic and it's been a while since I did whatever research I did.
 
I recall an interview with Alan Greenspan about his role in the crash. He seemed to think that whatever was happening with the sub-primes was manageable and the authorities in charge panicked. It seemed to me that he was part of the scam.
 
If the central bank was working for the best interests of the people, then it should have done something to stop the passage of that bad law.
 
 
Thomas Napers Added Jan 16, 2019 - 4:47am
“To briefly recap the 2008 recession, government regulations were removed from the banking industry circa 1995.”
 
That’s the liberal explanation of what happened.  In reality, it was government regulations that forced banks to loan too much money to unqualified home buyers.  In addition, thanks to Fannie Mae, banks could make those loans and then offset the risk by selling them to the government.  Accordingly, if it wasn’t for government intervention in the free market and regulations, the depth the 2008 recession would have been far more manageable. 
George N Romey Added Jan 16, 2019 - 7:45am
The crash had very little to do with CRA.  If it had been a case of a bunch of bad loans the crisis would have been easily contained.  The "crash" came about as Wall Street began to place bets on the impending doom of those loans.  Everyone on Wall Street knew they were garbage except the investors buying them so everyone cashed in.  The rating agencies went along with the gag so they also could cash in on what was seen as a mega profit making machine.
 
Then it went to another level in which insurance policies in effect were being written on other insurance policies (synthetic swaps).  Ultimately by late 2006 investors began to realize how bad these bundled loan securities were and stopped buying them.  However, the large money center banks and investment houses were making billions on this stuff and didn't want the party to end.  A handful of banks such as JP Morgan Chase and Bank of America began to quickly back away but GS, Morgan Stanley, Citicorp, Lehman, Bear Stearns went full charge ahead.  They continued buying this crap from scummy mortgage brokers under the belief the market would come back, or at worst, government would bail them out (which government did).  To hide the loans they put them into off balance sheet entities (SPVs) and took out credit insurance.  It's why AIG went belly up (but saved by government).  AIG was massive into writing credit default swaps on this crap that of course went bad.
 
People need to stop watching Fox News and go to a library and read a book.  Anybody that will actually read would know that in 2007 a few movers and shakers from Wall Street met that summer on Long Island.  They knew they had a really bad problem on their hand that would need government assistance but none of them wanted to go to jail.  They considered the major candidates for President believing the failure would occur under the new Presidency.  Of the 3 major candidates at the time-McCain, Clinton and Obama; Obama was seen as the one they could bamboolze the easiest.  They theorized (and very correctly) that if they appealed to Obama as a fellow intellect from the same kind of Ivy League schools they could take him in.  And that they did.
rycK the JFK Democrat Added Jan 16, 2019 - 10:15am
GNR
 
"The crash had very little to do with CRA.  If it had been a case of a bunch of bad loans the crisis would have been easily contained.  "
 
Why lend mortgage monies to those with poor or non-existent credit?
 
The banks failed, simply, because their asset books crashed and their bottom lines went red. 
 
The CRA was a scheme to push off bad loans  to Fannie Mae and her ignorant bother Frumpie. This allowed millions to escape mortgage payments for months. WaMU and other banks went down and out  because of this.
 
Another social engineering theory down the crapper. 
Dave Volek Added Jan 16, 2019 - 11:18am
Thomas
There are others here who have made a similar point. I should study this topic a little more thoroughly.
 
GNR
Another interesting angle to this story. I'm not sure the bankers had that much influence in the election. I suspect they covered all their bases and put plans in place for all three candidates. And you may be right: Obama was their preferred choice.
 
Ryck
I have to say that I'm having a little trouble believing that the government forced certain banks to hand out bad loans, but it is possible. More likely, the government offered a profitable way out for those institutions to give out bad loans, in hopes of earning votes from poor people in the next election. But this seems unlikely within a R administration. Again, I say, I should study this topic some more.
 
If this social engineering is indeed true, then it was bad social engineering. It would have been easy to predict that if more people became eligible for mortgage, the price of homes would increase, thereby making it more expensive for all new home owners, including the ones that supposedly benefited. In other words, the program was doomed to not provide much benefit to poor people and their housing.  Unfortunately far too many liberals cannot think past the first set of ramifications. There is always a chain reaction of some kind. 
 
rycK the JFK Democrat Added Jan 16, 2019 - 2:18pm
Dave Volek
 
"Ryck
I have to say that I'm having a little trouble believing that the government forced certain banks to hand out bad loans, but it is possible"
 
The Government Did It
 
21,460 viewsJul 18, 2008, 11:30am
"The Government Did It It is popular to take low lending standards as proof that the free market has failed, that the system that is supposed to reward productive behavior and punish unproductive behavior has failed to do so. Yet this claim ignores that for years irrational lending standards have been forced on lenders by the federal Community Reinvestment Act (CRA) and rewarded (at taxpayers' expense) by multiple government bodies.
The CRA forces banks to make loans in poor communities, loans that banks may otherwise reject as financially unsound. Under the CRA, banks must convince a set of bureaucracies that they are not engaging in discrimination, a charge that the act encourages any CRA-recognized community group to bring forward. Otherwise, any merger or expansion the banks attempt will likely be denied. But what counts as discrimination?
According to one enforcement agency, "discrimination exists when a lender's underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants." Note that these "arbitrary or outdated criteria" include most of the essentials of responsible lending: income level, income verification, credit history and savings history--the very factors lenders are now being criticized for ignoring.
The government has promoted bad loans not just through the stick of the CRA but through the carrot of Fannie Mae and Freddie Mac, which purchase, securitize and guarantee loans made by lenders and whose debt is itself implicitly guaranteed by the federal government. This setup created an easy, artificial profit opportunity for lenders to wrap up bundles of subprime loans and sell them to a government-backed buyer whose primary mandate was to "promote homeownership," not to apply sound lending standards.
 
The government forced banks to make bad loans. 
 
George N Romey Added Jan 16, 2019 - 2:50pm
And Wall Street tried making a mint off it. No one ever commanded Wall Street to begin their "exotic products."  Nor did were the rating agencies told to ignore the underlying securities and rate them all AAA to get business.  
 
rycK the JFK Democrat Added Jan 16, 2019 - 2:58pm
George N Romey
 
Wall Street took advantage of the sub prime loan system as they knew they could dump  off phony mortgages to Fannie and Frumpie and make money.
 
The French thought  that Fannie, thru the securitization process also guaranteed  the loans and demanded some of these be refunded, which the Fed apparently did. 
 
The political point  here was  that Clinton thought he could buy votes by forcing the banks to make bad loans in areas rich in voters who vote mostly Democrat. 
George N Romey Added Jan 16, 2019 - 3:22pm
Wall Street also created things like synthetic CDOs to profit off the junk.  They continued to buy the loans even after Fannie and Freedie were backing off.  Everyone tried to profit off off trash.  Some on Wall Street tried to stop it knowing what would happen and were fired or demoted.  Just maybe you should spend some time reading books by people that were actually working for the banks.  
Dave Volek Added Jan 16, 2019 - 3:59pm
Ryck
 
The longer I stay on Writerbeat, the more I see how screwed up USA really is.
 
Maybe Canadians better start building their own wall.
 
But we'll keep the political soap operas beaming over the border. So much more entertaining than ours.
 
Logical Man Added Jan 16, 2019 - 9:28pm
To quote George Carlin....
When you are born you get a ticket to the freak show.
When you are born in USA you get a front row seat.
rycK the JFK Democrat Added Jan 17, 2019 - 9:22am
Dave Volek
 
"The longer I stay on Writerbeat, the more I see how screwed up USA really is."
 
Democracy has never worked because too many small fry have enormous power and can work independently to grab money and power as elected officials or as bureaucrats. 
 
Look at the escalating debt, everywhere in the Western world and ask: whey will this end and how? Massive inflation? Currency failures??
 
Currently governments in the West are trying to  provide most or all needs for their citizens and this is funded in debt. This cannot last. 
Dave Volek Added Jan 17, 2019 - 11:48am
Ryck
 
A hundred years ago, I think we would have said that western democracy has its flaws but it is superior to anything else. I would say western democracy is showing its obsolescence more and more. Or should I say: some of us are wondering. 
 
The government debt issue has always bothered me since I was old enough to vote. I couldn't figure why more governments are not declaring bankruptcy more often. Even the word's biggest corporations have a limit to how much debt they can carry. But once I got a little handle on monetarist economics, I gained some understanding of why there hasn't been a collapse a lot sooner.
 
Maybe the wizards know what they are doing, as we aren't getting a total run of the currency. But the 2008 recession shows that either they don't know as much as think or they abused their responsibility for profit. Probably a bit of both.
 
When I introduced this topic on another forum, I got wind that there are several competing monetarist theories out there. So it seems a few knowledgeable people are thinking about alternatives to fractional reserves as a main mechanism to central banks.
 
This is good; when the TDG gets closer to its end result, it just might to adopt one of those theories as its basis for a central bank.
 
 
 
 
 
rycK the JFK Democrat Added Jan 17, 2019 - 12:53pm
Dave Volek
 
"A hundred years ago, I think we would have said that western democracy has its flaws but it is superior to anything else. I would say western democracy is showing its obsolescence more and more. Or should I say: some of us are wondering. "
 
More than A hundred years ago the founders decided to not use the Roman system [too complex] and to go for Athenian type democracy with only male landowners voting.  That system kept the providers in charge of government  for the most  part. That is gone. 
 
Democracy failed in Athens and is failing now because of universal voting where the majority of voters are influenced by demagoguery and other factors to vote for things that do not benefit the whole population. The original ideas of democracy have been obviated. 
 
"The government debt issue has always bothered me since I was old enough to vote. I couldn't figure why more governments are not declaring bankruptcy more often. "
 
Governments today run on debt. Period. There is never any long-terming planning on this matter. The far left think they can just tax the rich [Bernie Sanders] and pay for everything. That is wrong. The rich will flee. Krugman and other frauds think we cannot go broke because we can print monies ad infinitum
 
We have major and many insoluble problems to face very soon. 
rycK the JFK Democrat Added Jan 17, 2019 - 1:09pm
Dave Volek
 
"Maybe the wizards know what they are doing, as we aren't getting a total run of the currency. But the 2008 recession shows that either they don't know as much as think or they abused their responsibility for profit. Probably a bit of both."
 
There is an amusing utube clip that shows Peter Schiff asking Krugman, Hank Paulson, Greenspan and others if there could be a crash in 2008 and they all said NO. I cannot find this one. It is a scream. 
 
Most of these people, especially Krugman, are political advocates and always follow some political theme rather that make a decision from the data at hand. 
 
If the biggies in the government missed the 2007 Depression [that is about a year after it started] then we have dolts and idiots at the help and the shoals are directly ahead. 
 
Our currency is stable now for two reasons:
 
[1] it is the reserve currency with no substitutes around
[2] the value of the dollar is fixed by Forex trading as the dollar floats against all other currencies. 
 
So, the markets will determine if the dollar sinks or soars. 
 
The dollar may be inflating since gold has risen about $100 in the past few months. Despite what people say, the dollar is influenced by gold and oil markets. Gold is currency in some states and is traded around the world and has been for more  than 5000 years. 
 
At this moment, the dollar is sound and that will probably change slowly. I hope. 
rycK the JFK Democrat Added Jan 17, 2019 - 1:17pm
Dave
 
I found this from 2007: https://www.youtube.com/watch?v=Yr7xu8520RM
 
and https://www.youtube.com/watch?v=wB0eFrmUOhw
Dave Volek Added Jan 17, 2019 - 2:45pm
Thanks for the links. If time permits, I shall my best to get to them.
 
I find monetarist economics very fascinating and complex. It's on my bucket of things to study. But . . . . .
Jim Stoner Added Jan 17, 2019 - 3:43pm
A lot of people got fooled last time around:  consumers who were fooled by ARM's and bought more house than they could afford, banks who bought trash from brokers, traders who bought trash from mortgage lenders, the GSE's who thought they were buying good loans, and everyone who thought mortgages were always going to be good risks. 
 
They were bitten by the Black Swan, a secular downturn in home prices which fed the downward spiral.   Some folks in banks, other financial institutions, and the rating agencies should have been charged with fraud and corrupt practices, but that wouldn't have saved us much, only given us some revenge on the culpable. 
 
Mortgage securitization is not in itself a bad thing; government policies to encourage home buying are not in themselves bad, but both were taken to abusive extremes.  The Fed didn't cause the last disaster, and taxpayers did not pay the bill for it, though investors got hosed.  I can honestly say that while I was once in the thick of this (in the 1990's), I was several years and thousands of miles away by the time it went downhill. 
 
The thing that bothers me most is that we have not learned much, except we know better than to think mortgages will always be safe.  The de-leveraging consumers made after the Great Crater seems to have been wholly reversed. 
George N Romey Added Jan 17, 2019 - 3:51pm
This was not a "black swam."  Do some reading for god's sake.  People on Wall Street knew the meltdown was coming.  Even the rank and file at the credit rating agencies knew the agencies were giving AAA ratings just to get the business from the investment banks.
 
Some tried to warn senior management just to be rebuffed.  Some sold their company stock and left Wall Street.  Some went looking for political coverage, namely in throwing their support behind candidate Obama because he was viewed as a stooge.  Some desperately looked for a merger partner that would save them.  But the word was if only in hush tones the end was coming and wasn't going to be pretty.
rycK the JFK Democrat Added Jan 17, 2019 - 4:35pm
GNR
 
Even the rank and file at the credit rating agencies knew the agencies were giving AAA ratings just to get the business from the investment banks."
 
Remember Krugman, Paulson and Greenspan  flatly rejected the idea of a crash in 2008. Some minor players might have suspected and Peter Schiff was very noisy about it. 
 
True, not a black swan. Also true are the agency ratings as they did not have the correct info on the liability here as Fannie and Freddie would buy up the worst of the mortgages and all would be well. Nobody wanted to believe in a crash. 
 
The bottom line here is Cheap Credit: IF  you loan out money to people who cannot pay it back then the loaners or banks will lose big and the government will have to come in in rescue the lot. Happened in Sweden, Ireland and Greece and now Italy has its turn. 
George N Romey Added Jan 17, 2019 - 4:50pm
The credit rating agencies are supposedly tasked with giving an opinion to the credit quality of whatever they are examining.  Your argument is bunk.  Under your argument the agencies would take into account whether credit insurance was available.  I was working in NYC at the time and exposed to the rating agencies.  Many of their analyst told me they were told to shut up about the risks.  
rycK the JFK Democrat Added Jan 18, 2019 - 12:58pm
GNR
 
"Under your argument the agencies would take into account whether credit insurance was available. "
 
Half a story on credit. 
 
 Many assumed Fannie Mae insured the lot. 
George N Romey Added Jan 18, 2019 - 5:10pm
Eric Hibbert was born in Brooklyn New York.  Hibbert was born in Jamaica but immigrated to the US with his parents when he was ten. His parents were of modest income but required Eric to study hard.  He eventually went to UCLA obtaining an engineering degree.
 
Hibbert soon grew bored of engineering and by circumstances began to scrutinize securities backed by mortgage loans on Wall Street.  He was later hired by Lehman Brothers in 1994.  A year later he was dispatched to California to examine a subprime lender FAMCO for Lehman Brothers.  Lehman Brothers wanted to get into the subprime mortgage market displaying then market leader Prudential, citing huge fees that could be generated on these deals.
 
Hibbert had been raised by two working class parents, instilled by their values.  He inspected loan files and met with senior management of FAMCO. Hibbert thought the place sucked.  The managers were slick, the borrower quality was abysmal, and the loan pricing was outrageous.  When he would leave the FAMCO office at night he felt as though he needed a shower as soon as he returned to the hotel room feeling dirty from just being in FAMCO corporate offices.
 
He returned back to New York with his report and analysis.  He felt 100% sure that an institution such as Lehman Brothers with a proud history dating back to 1850 would immediately dismiss any chance of doing business with FAMCO.  To his surprise, disgust, and huge disappointment CEO Dick Fuld and his cronies jumped at the chance to sell off securities backed by loans originated by FAMCO.  The credit rating agencies immediately bought the idea of "slicing" to get a AAA rating, motivated by the big fees that Lehman would pay for those ratings.
 
So much for the innocence of Wall Street.
Logical Man Added Jan 18, 2019 - 6:51pm
Another oxymoron - the innocence of Wall Street!
 
All wars are bankers' wars.
 
Greed is the religion of bankers.
rycK the JFK Democrat Added Jan 19, 2019 - 10:17am
 Insignificant testimonials and slogans .
Katharine Otto Added Jan 25, 2019 - 9:01pm
Dave,
I'm posting an article in response to this one.  You'll note I reference this article, and The Money Masters YouTube.  Also referenced are Money as Debt, and America:  Freedom as Fascism, that were recommended by commentators on this thread.
 
I believe this subject is worthy of considerable discussion, as it is little understood but affects us all.
rycK the JFK Democrat Added Jan 26, 2019 - 1:54pm
ALL
 
The notion of 'leveling' or redistributing the wealth has never worked and is always related to disasters like PRC, Cuba, Cambodia,  USSR, Venezuela and other spots not to mentions some 40 cases in Africa including the utopias in the US and Mexico in the 1920s-1940s. Sweden and Switzerland have special economic inputs such as war supplies and hiding dirty money from dictators. 
 
There as always been a ruling class that controlled about 98% of the wealth and power since the last 5000 years. 
 
This flat does not work. Period. 
Jim Stoner Added Jan 26, 2019 - 4:03pm
Don't take my word for it--the guy who invented the term Black Swan in a modern context (Nassam Nicholas Taleb) said this was one.  George, stop being abusive--I've read his book; I've securitized mortgages, I know what happened, though I was not there.
 
What seemed improbable to many (the drop in home values) was one of the major contributing factors to the crisis.  The commercial rating agencies were absolutely culpable, but not exclusively so.  Of all those who deserve blame (including consumers), government was one of the least.   CRA regulations were not the cause; there are lots of ways to address CRA responsibilities without giving fraudulent mortgages to people without considering their ability to pay.
 
Large bank directors, trade departments, and shareholders get their share.   The main crime was fraudulent conveyance--people selling crap and misrepresenting it. But I don't think anyone got busted for it. 
Ryan Messano Added Jan 26, 2019 - 4:41pm
Dave, if your ideas are worthwhile, they will hold up under strong criticism.  Since you are a snowflake who can't handle strong criticism without running away with your toys, you will continue to have mediocre ideas and stay in your safe space, playing with other snowflakes. 
Ryan Messano Added Jan 26, 2019 - 4:43pm
Of course, proud people never can handle criticism.  They absolutely crave the admiration of people, and will be the implacable enemies of any who criticize them.  You aren't alone Dave, the people you get along with best have the same issue.
Ryan Messano Added Jan 26, 2019 - 4:44pm
And, true hatred is ignoring ideas of those who criticize you.  You are a very hateful person, but you've learned to hide your malice.
Logical Man Added Jan 26, 2019 - 5:57pm
The big problem of the system we currently suffer from is that money is debt based.
An interesting concept regarding currency/exchange that few have run across is Tally Sticks. Not practical in the modern era, but the concept could be updated.
 
rycK the JFK Democrat Added Jan 27, 2019 - 3:48pm
Given the broad spectrum of human communication we can confidently state that, on balance, human predictions and beliefs are usually false as verified by history. Upon issuing a correct and valid, solid law of Nature by folk like Newton, Galileo, Einstein and others the common result is refutment. 
 
Assuming that a single person in all of history has had the very best 'solution' to any problem then the probability is that few, if any, will accept or even believe in that solution, now, before or later. The earth is still flat for millions. 
 
Noone can know everything and ignorance is manifest in all cultures so agreement is nil, or less on any new concept or issue. 

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