Secret Workings Of The Central Banking Syndicate.
Central banks provide a mystical approach to solving economic problems although they were initially created to solve short-term financial panics. The first central bank was the Bank of England which was established in 1694. It started out as a private institution but eventually took on a monopoly over all banks in England (all private banks either joined or were forced out). The allure of the system is to even out the panics by centralizing power in one place. The central bank of the United States came over two centuries later in 1913 as the Federal Reserve. The Fed has a mission to help moderate inflation and keep unemployment in check. But what happens when the central bank goes from main protector of the economy and becomes a large reason for the financial problem itself? There is little debate that monetary policy at the hands of Alan Greenspan led to the housing bubble. The subsequent bust is leading to our current financial problems. What people forget is that the Fed is designed to protect the banking system even if this is contrary to the overall success of the economy and most people.
"(Reuters) The purchase was part of its $600 billion program, dubbed QE2, aimed at stimulating investment and economic activity.
The balance sheet — a broad gauge of Fed lending to the financial system — expanded to $2.759 trillion in the week ended May 25 from $2.742 trillion the prior week.
If you look at purchasing power of a dollar in 1800 and one in 1900 you see that it was relatively stable over time. Only after the Fed took hold in 1913 did we see a steady decline of the purchasing power of the U.S. dollar.
The more troubling of the two big line items above is the over $1 trillion in mortgage backed securities. Mortgage backed securities brought the system to a halt yet here we are loading up the Fed balance sheet with them. Why is the desire to keep housing inflated such an important objective? Did the American public have a chance to vote on this? Of course not since the average American is drowning in debt and is being forced to bailout the banking system through the perverse costs of inflation and debasing its currency.
"(Naviny) Prime Minister Mikhail Myasnikovich said on May 20 that he opposed calls for freezing consumer prices in Belarus amid high inflation.
"If prices are frozen, people will simply bring carloads of goods out of the country and there will be panic demand for goods," the government's BelTA news agency quoted him as saying at a news conference in Minsk.
"It's no secret that such rampant consumer lending against the backdrop of incomes limited to wages and fairly low labor productivity has led to a situation where households have much cash at home and in deposits and want to spend it," he said, adding that gold and other jewelry worth some 1.1 billion rubels had been bought at stores in Minsk on May 19 alone.
This unique program bailed out commercial real estate loans in some of the worst performing states. Close to half of the Maiden Lane loans sit in California and Florida and over 80 percent are loans in the hospitality industry. We have shown information highlighting assistance to empty malls in Oklahoma to Hilton properties with these programs. Now how did bailing out these loans help the country where the average American makes $25,000 per year? You also have the case where one out of three Americans has no savings whatsoever.
The Fed views itself as doing a greater good here but in reality it surrounds itself with pinstriped bankers mainly concerned with their own bottom line. Their opinion is clouded by the company they keep. They have little sense of what is happening to the 44,000,000 Americans on food stamps or the close to 20 percent of Americans that are underemployed. We also have no deeper knowledge of many of the trillions of dollars of debt on the Fed balance sheet. There is a big difference from having a mortgage that is underwater by say 10 percent versus owning the $50 million paper on an empty hotel. The Fed keeps expanding its balance sheets because member banks have figured out that they can use the Fed as some sort of escape hatch. Dump the loans and ignore them until something or some other crisis forces an acknowledgment of the decades of bad loans.
The secretive workings of the central banking syndicate – Federal Reserve balance sheet reaches another record. Fighting monetary inflation by creating it..