The Federal Reserve is acquiring power because of the financial collapse it caused. How is this con being run? by Josh Koch
(libertarian)
Tuesday, July 8, 2008
"By the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to help the Federal Government coordinate a national effort to expand opportunities for faith-based and other community organizations and to strengthen their capacity to better meet social needs in America's communities..." Executive Order, 29JAN01, President Bush
Through the madness of the Bush reign, I have wondered where this government derives so much of its power. For instance, where in the Constitution does one find the explicit authority for the President to "expand opportunities for faith-based and other community organizations?" After extensive study of the founding document, I regret to inform this government that no such authorization exists.
And yet this behavior is commonplace. We, in the Libertarian Party and the freedom movement's body politic, know this to be the case. We can recite chapter and verse of the Constitution, but the forces of the nanny state keep referencing some mythical document also called the "Constitution" for their hair-brained schemes. It must be a truly amazing document, this shadow "Constitution," which has somehow managed to evade my studying eye despite my best efforts to locate it.
Nowhere is this lack of adherence to the Federal Government's charter more apparent than in Alan Greenspan's Housing and Easy Money Bubble. We have grown up for generations under the thumb of this quasi-private banking cartel and its government-underwritten subsidiaries. Under this arrangement, investors and taxpayers take the risks while private bank entities gain the profits by sucking the economy and the Treasury dry of any real value at all. It has been a profitable venture for everyone but the taxpayers.
Now, there's a wrinkle in the plan: Since the Federal Reserve Cartel loans money through the US Treasury Department, its retail subsidiary, and, like any bank, must keep making loans to make a profit, it has glutted the market with dollars. At the same time, Freddie Mac and Fannie Mae were doing the same thing...giving mortgages away and cooking the books so investors would be lulled into keeping them inflated with cash.
The plan worked for a while, but it suddenly went south late last year. Now, even with the glut of cash, the American taxpayer is staring down liabilities that stagger the mind. Mac and Ms. Mae are government-sponsored entities (GSE's), and they are undercapitalized. One can only guess where they intend to derive all that extra capital, but my guess is that you are getting that expectant look as I write this. After all, we can't just let a GOVERNMENT-sponsored entity collapse. "Great Americans" would never let their government appear over-reaching, corrupt, and stupid, would they?
If that were our only problem to come out of this, we could count ourselves fortunate. Sadly, we're not even that "lucky." It turns out that other entities have been consolidating their powers behind the scenes.
The Federal Reserve Cartel runs a monopoly on lending through its various subsidiaries, as I mentioned before. What it lacked in regulatory power, it maintained through coercive means. Now, the process is about to get much more streamlined.
Instead of buying power by threatening the political fortunes of politicians, the Federal Reserve Cartel, a private bank, is getting ready to take over regulating US banks and investments. And why not? As with the Treasury, the Federal Reserve Cartel is literally acquiring the Securities and Exchange Commission (SEC). It's as though the executive branch is outsourcing our economy to a bunch of robber barons.
Apparently, they've been waiting to do it for eight years. According to the Securities Exchange Act of 1934, banks were prevented from acting as broker-dealers. Companies that wanted to dabble in banking and investment had to keep both aspects of their business very distinct. When I got my securities license some years ago, I was made very aware of this fact.
An important provision of the Gramm-Leach-Bliley Act amended the definition of "broker" in the Securities Exchange Act of 1934 so that banks would no longer be completely excluded from the broker-dealer registration requirements. At the same time, the new law created specific exceptions from those requirements. Proposed Regulation R would give effect to these bank broker exceptions, in a way that accommodates the traditional business practices of banks, and at the same time furthers our goal of better protecting investors.
So, with a little regulatory sleight-of-hand, a bank cartel goes from being prohibited from dabbling in investments to being able to regulate and control the nation's entire banking and investment industry. And they say government moves slowly!
Now, the Board of Governors will be regulating investments, investment banks, broker-dealers, banks, savings-and-loans, thrifts, and just about everything else having to do with money in the United States. Who better to watch the henhouse than the foxes who created the Great Depression and the Housing Bubble?
If we do not dismantle this monster, it will consume us entirely. Our time is running out, and we must act soon. These people are gaining power by causing collapses, and this will only lead to ruin if we do not act decisively.
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Posted By: Walt Thiessen
Date: 2008-07-08 02:25:15
Well, yes and no. The Federal Reserve's overall plan didn't just start going south last year. It's been heading south overall since its inception in 1913, but it takes many, many years (many decades, really) for the scenario to play itself out. In the meantime, it goes through apparent booms and busts, although the reasons for those booms and busts are less obvious to the uninitiated. Right now, we're heading for a bust. Can the Fed salvage itself and turn things back into a boom? Yes. They've done it before, and they'll continue to do it until finally, one day, the whole system falls apart leaving the country in economic ruin. The hard part is predicting exactly when that will happen. The only thing we can be sure of is that, over time, the average range of the boom and bust cycle will increase, meaning that the consequences in the long-term become more and more dire. We can also be sure that the end will come some day. We just don't know when that will be.
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