none of the monetary reformers are offering workable replacements for finance capitalism
oldickeastman
The NY Fed Bank has been buying securities from international speculators with dollars deposits, a process called "Open Market Purchases" and "Quantitative Easing."
The securities the Fed has been buying from those anxious to dump them are securities that have "gone bad." Many are securitized mortgages, the bundled mortgages that banks sold to Wall Street and Wall Street bundled into a new product to sell to investors. But the deflationary offensive waged by international bankers against the American people made it impossible for millions of Americans to continue mortgage payments.
There was simply not enough dollar deposits in all of our checking accounts to cover our living expenses, our business expenses and our debt obligations. So many of the bundled mortgages in the securitized financial assets went bad. But of course each of those mortgages was secured by the house itself, but the deflation took down home prices as well, meaning that the value could not be gotten back from sale of the property. And on top of that the way securitization was done separated the buyer of the securitized mortgage from the actual mortgage contract, in many cases the mortgages could not be claimed.
So the Fed, always full of mercy for anyone who has had bad luck in their economic or financial dealings generously agreed to take all of those securitized loans from those speculators who were stuck with them and provide top dollar price for them, a price that would have been the price if the housing market had remained strong and if the borrowers had not had reductions in income that forced so many defaults.
And how could the Fed make such a sweet and generous deal for the speculators who bought securitized mortgages?
Very simple. The rules of central banking permit thin-air currency to be created by the Fed when securities are given to the Fed to "back" them. The money comes from thin-air at the command of authorized fingers operating a computer keyboard. So the Fed takes, say, a trillion dollars "face value" dumping of securitized mortgages -- by which I mean the price those mortgages would be worth had deflation never happened -- and gives the "dumpers" a trillion dollars of Federal Reserve dollar denominated deposits, i.e., money with the status of hard currency (by which I mean paper legal tender currency.) Worthless bundled mortgages for money.
But did you ever ask why the mortgages were securitized in the first place?
The mortgages were securitized because the banking system did not have enough reserves in this deflation to offer new mortgages. And that was a serious problem, because with no investment or construction reaching domestic American business and household sectors Americans needed new mortgages and refinancing, and second mortgages to provide a money supply with which people could carry on the economic transactions that make their homes and businesses operate. The banks were not about to put their own money into a deflationary economy, and he people as small-savers did not have the money deposit in banks to back new loans -- so that banks arranged for the mortgages they held to be securitized and sold to foreign creditors, since those foreign creditors saw no advantage in and had a definite aversion to buying American products from Americans in America. The international banking and investing community was determined to keep the US on a starvation diet. But if the mortages, which the banekrs knew would go bad in a deflation, could be sold to foreign dollar holders as financial instruments (securitzed mortgages) then they would have the other people's cash with which to lend to Americans looking for second mortages to pay off credit card debt by consolidating into a lower interest arrangement. Of course if they refinance they do not realize that all of the interest they paid "front loaded" (pay the interest before you start paying down the principal) they actually start all over again every time the refinance -- but their finances in the deflaion are so desparate that they don't bother to think too hard about what they are doing.
Anyway, the deflation is continuing. The foreign holders of the securitized mortgages see what has been done -- and so the Federal Reserve Deicision makers -- not the chairman or board of governors or the FOMC committee (who are all price takers in all the loanable funds for securities trades the Fed makes with the dozen or so dealers representing the big bank owners who are in fact the market makers. They deal and then the FOMC and the Board of Governors are told what was done. The Fed is a powerless middle-man.
I hope you see the bad trap we are in having the banks and the passive Fed making thse deals.
Thanks to the Fed there are trillions of dollars offshore, while Americans at home are losing everything because there is not purchasing power in circulation here to keep our domestic world going.
American Populist Social Credit is a better system that can be quickly initiated to save the people, the economy and the nation. It cuts out the cancer with immediate repudiation of the national debt. It nationalizes money creation and circulation. It provides a stock of purchasing power (legal-tender dollar deposits in a bank) to each person on a regular basis, so that consumer demand will immediately begin rescuing dying businesses and allowing the start-up of new ones. All producers will find hat consumers have money to buy their goods and more of it because their debt burden has been lifted.
Banks will be broken up without closing. There will no longer be a central bank or national banks or regional banks. Banks will be creatures of the State in which they are chartered.
There will be no holding companies. Likewise, corporations will be broken up, not according to state, but according to which individuals or partnerships can buy what part of them. The corporation will be abolished. Only single proporietorships and partnerships ( co-ops will operate as partnerships). And corporate law will be expunged from American law.
Now what you have to understand is that this is your only ticket out. No one else is offering you a ticket out of this hell we are now in.
Take the ticket. It is free. It has been paid for by the reformers and economists of the last two centuries -- they gave their lives to give you this chance.
It's called American Populist Social Credit -- and the "credit" that gives us all the household spending money dividend, that "wealth pump," that we can put into our currently heartless economy -- it is paid for by the men who devised it for us. It is a technology for running an economy without booms or busts, with maximum realization of human potential and with no design flaws that enable cheaters to rig the game. You can't rig a system that gives the same amount to everybody.
Don't expect any corporate news, or hireling politician or academic to back this idea. These people never seek the common good. The common good, all of us, must do that ourselves.
If you want it you need to join others in persuading people to come together, to agree that they agree, and to assert unified public opinion that this is what we must have.
One more thing. The next worsening of the rate of deflation will be a killer. You must face one grim reality: Your indecision and your "waiting to see" must eventually be fatal. There is no pulling out of this because of design of the system. You have to switch systems now. A point will be reached with the "patient" is too sick to withstand the operation. It is our best hope that we have not reached that point.
Take the idea - change the name -- repackage it -- disassociate yourself from the controversial people who originated the idea and him who communicates it to you new -- but one way or another -- let the people know this is our ticket to a good America and you need to board the train right now.