The Washington-Wallstreet Industrial Complex: Obama again called - TopicsExpress



          

The Washington-Wallstreet Industrial Complex: Obama again called on his friends in Wallstreet to scare us into surrendering to partisan rule. What happened to "a government of, by and for the PEOPLE?" Look at the current situation 5 years after TARP. The powers-that-be have been made whole, richer and more consolidated, but the poor and middle class have been crushed down even more, inspite of continuous promises to the contrary. Why? Look at what caused the mortgage bubble and crash: politicians and bankers exploiting the poor, promising them the moon, all in return for power (votes) and profits. And they continue to feed us ordinary people with false promises. Politicians claimed home ownership was a "right" and demanded banks weaken loan requirements (zero down loans, minimal checking of ability to pay, etc.) Regulators were told to shut down banks that "failed" to issue loans to the poor in sufficient numbers, threatening to call them "racist". Everyone was told home prices would "never fall", so banks began selling mortgages to home buyers that lacked the resources to handle a downturn. After all, they could "always" foreclose on the house safely, due to its value being inflated! Then nervious as mortgages piled up, the bankers hedged their risk by selling bundles of these risky mortgages to trusting investors as mortgage-backed bonds. They sold at inflated prices, justified by the argument that very few mortgages in the bundle would default, as promised by the politicians and suggested by faulty statistics based on 75 years of sales under the traditionally strict loan requirements of PAST years. They made big profits selling these bundles of risky bonds. Then recognizing the growing pyramid of risk, the largest banks sold insurance against a mortgage bond crash to each other, again making profits. But by assuming only a fraction of bond bundles would ever collapse, and unaware of how much cross-insuring was going on, they sold more than there own reserves could cover, assuming the insurance they bought from other banks would suffice as back up their reserves. The economy and housing market on fire, prices shot up as more an more were sold to house "flippers", again under the new nothing-down, no-paperwork rules. Home building continued to accellerate, filling prospective new subdivisions, Eventually the market saturated, flippers began to default, home prices fell, and it accellerated up the chain as mortgages, then bundles of nothages, then intra-bank insurance commitments began drawing down reserves. The bubble had burst. In a matter of days, the biggest banks discovered that their scheme of intra-bank loans oversold their reserves. Since all banks were being hit simultaneously, none had reserves to loan to others! In stepped the Treasury. To stop the spreading fire from consuming the rest of the economy, the government swallowed the hot potato of debt, issuing TARP loans to prop-up the banks through the crisis. We continue to this day swallowing trillion dollar debts each year, shielding the country and the world, while expanding the promises to the voters even more with expandedd foodstamps, unemployment benefits, obamacare, etc. Like the banks promised to insure each other, the nations of the world are loaning money to each other and forming aliances (European Union, World Bank, etc.) to build firebreaks against collapse. Where is the money coming from to do this? Well, certainly products are being manufactured, oil/gas is being discovered/extracted, etc. But this is not sufficient. World wide, nation after nation is growing their economy slower than their population. To fill the void, national banks in many countries are "creating" pretend wealth, borrowing from the future, assuming the future citizens world wide will be rich enough to pay off the loans. This is where the powers-that-be (political-financial-industrial complex) comes into play again. "The rich" shorten their name, are angling to survive by seeing their wealth protected by inflation. Eventually there will be inflation, currently hidden on the books of the national banks. All of this would have been avoided if strict financial regulations governing borrowing had been maintained. There is a "Law of the Land" that is the ultimate backstop for runaway borrowing. This is the Debt Ceiling law currently insisring the government STOP borrowing from the future. And the Powers-That-Be, the same Political-Financial Industrial Complex that got us in this mess, "The Really Really Rich" and there political cronies, are insisting we blindly increase that limit, and blow on by $17,000,000,000,000 in national debt. Given the history outlined above, what will YOU tell your representatives to do? ...how much pain do you want to push off on your grandchildren?
Posted on: Thu, 03 Oct 2013 19:09:53 +0000

Trending Topics



Recently Viewed Topics




© 2015