I am Confused...

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Southerner's picture
Southerner
Status: Bronze Member (Offline)
Joined: Sep 7 2009
Posts: 36
I am Confused...

I need someone, a fellow member, the Mods, CM, anybody to rationally explain to me how the the privately owned U.S. Central Bank, AKA 'The Fed" and the TBTF banks benefit regular people who pay income taxes in this country and is benevolent, helpful and nurturing toward the Economy, one of the Three E's.

I am a bit cynical, however if I am incorrect in anything above or below, please refute what I refer to as fact because I truly would like to understand how lucky we are to have this system of seemingly unpayable Fed and Federal debt creation in this country.

Fact:

Many banks made many bad residential and commercial loans > The Fed and Federal govt (through Fannie and Freddie) purchased these bad loans at 100% of written loan value, not the current market value > Results: The TBTF banks were given lots of money, the US govt debt leaves those who pay income taxes on the hook to repay the debt.

Fact:

The Privately owned US central Bank (AKA 'The Fed') gives almost free money (0.25% interest) to the TBTF Banks > The TBTF Banks graciously loan it to the Federal govt at a much higher (relative) interest rate by purchasing  various length US treasury bonds at the frequent bond auctions > Results:  The US govt debt goes higher and higher, The TBTF Banks are guaranteed payment by the US govt via those citizens who actually pay income taxes and how is the Federal govt supposed to pay the Benevolent TBTF banks back when there are fewer people in this country actually paying Fedral much less state income taxes.

There are other examples, these are the ones on my mind at he moment.

I am confused.  Where I am incorrect, please explain as it does not appear the Privately Owned  US Central Bank (AKA 'the Fed') and the TBTF Banks are actually helping that most important E at the moment, the US economy.

CM, any thoughts?

Southerner

 

 

 

aggrivated's picture
aggrivated
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 542
Re: I am Confused...

Being a 'Southerner' I will suggest an analogy.  The TBTF banks (aka 'The Fed') are the Plantation Owners and the rest of us are the slaves.  As long as crops are growing and being harvested successfully the slaves get a house and get to eat.  Some of them get punished if they try to step outside of  the system.  If the weather turns bad or some other 'outside force' (aka 'The Laws of Economics- see the Austrian understnading of economics to dig into this) ruins the crop, then the slaves suffer much more than the Owners.  Some die, some are sold, many go hungry, but the primary concern is to keep the Plantation Owner in control and from starving.  The slaves could rebel, but they don't have the arms and are weak from starvation.

Debt is slavery.  Since our whole money system is built on debt, then it is a system of slavery.  To the degree that you can take your debt backed money and acquire physical property that will help keep you alive and well without money you will be in much better shape when the weather turns bad in the near future.

All analogies break down when pushed to the details, but this helps me understand the confusion.

jhart5's picture
jhart5
Status: Bronze Member (Offline)
Joined: Jul 25 2009
Posts: 89
Re: I am Confused...

Great Analogy Aggrivated - J. Hart

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