Posts Tagged ‘great depression’
www.globalresearch.ca/index.php?context=va&aid=27611
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By Ellen Brown
Global Research, November 11, 2011
Henry Ford said, “It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
We are beginning to understand, and Occupy Wall Street looks like the beginning of the revolution.
We are beginning to understand that our money is created, not by the government, but by banks. Many authorities have confirmed this, including the Federal Reserve itself.
The only money the government creates today are coins, which compose less than one ten-thousandth of the money supply. Federal Reserve Notes, or dollar bills, are issued by Federal Reserve Banks, all twelve of which are owned by the private banks in their district. Most of our money comes into circulation as bank loans, and it comes with an interest charge attached.
According to Margrit Kennedy, a German researcher who has studied this issue extensively, interest now composes 40% of the cost of everything we buy. We don’t see it on the sales slips, but interest is exacted at every stage of production. Suppliers need to take out loans to pay for labor and materials, before they have a product to sell.
For government projects, Kennedy found that the average cost of interest is 50%. If the government owned the banks, it could keep the interest and get these projects at half price. That means governments—state and federal—could double the number of projects they could afford, without costing the taxpayers a single penny more than we are paying now.
This opens up exciting possibilities. Federal and state governments could fund all sorts of things we think we can’t afford now, simply by owning their own banks. They could fund something Franklin D. Roosevelt and Martin Luther King dreamt of—an Economic Bill of Rights.
http://beforeitsnews.com/story/1329/881/Breaking_Going_Viral–The_Crash_Is_Coming:_I_Told_You_So.html
~sighhhhh~jude
Italy, France, and Portugal will go belly up soon. This tragedy will collapse the European Union economy. Riots will go worldwide–if we aren’t there already. Now, this is what will happen in the United States during 2012:
- The unemployment percentage will start rising again and approach 15%.
- The national debt will breeze by $15 trillion and will approach $20 trillion.
- Chrysler Corporation will go belly up.
- Bank of America (BoA) will go belly up because it is run by a bunch of incompetent crooks. They cheated us over 40 years ago, and I’ve never forgotten that. I have a very long memory. So, take your money out of BoA and put it in smaller, local banks and savings and loans. That will help small businesses increase job creation.
- The Stock Market will crash. Get out of the Stock Market, now! Buy precious metals (gold, silver, etc.).
- The economy will collapse because of Obama’s ridiculous, idiotic fiscal policies. A presidential challenge will be made to Obama soon by a patriotic, moderate Democrat. Obama will be railed out of town.
- The Fed will continue to counterfeit (print) funny money not backed by gold, which will start hyperinflation.
- Fannie Mae and Freddie Mac will go under due to incompetent, criminal management.
- The housing market will get even worse than it currently is.
- Don’t make any large purchases and obtain any long-term repayment loans. Live by cash and carry.
- The U.S. dollar will sink to become worthless.
- A double-dip recession will commence followed by a full-blown recession worse than The Great Depression.
- Major rioting, vandalism, and killings will occur in all major cities across America. Obama will declare martial law.
- A world war will commence.
- The Congressional Super-committee is a bunch of worthless, gutless lawbreakers. They WILL NOT do what is necessary to solve the United States’ fiscal problems. Mark my words. They are all driven by politics, not for the good of the country and “We the People.” Idiots!
What can you do about all of this:
~the problem with this and the EBC banks is that while Britton can still print more money, Spain and Italy who were actually in very good shape till *the bank runs* and nobody buying bonds, should have kept their own monetary systems…Unfortunately now that they chose to be tied to the Euro they cannot fix this problem themselves~sighhh~jude
Thu Sep 15, 2011 12:26am EDT
(Reuters) – Billionaire investor George Soros has warned Europe’s debt crisis risks triggering another Great Depression unless euro zone leaders adopt a series of radical policy measures, including the creation of a common treasury.
Soros, in an article for the New York Review of Books and Reuters.com, says policymakers must prepare for the possibility that Greece, Portugal and perhaps Ireland will have to default and leave the euro zone. (link.reuters.com/qap73s)
“It appears the authorities have reached the end of the road with their policy of ‘kicking the can down the road’,” he says.
“Even if a catastrophe can be avoided, one thing is certain: the pressure to reduce deficits will push the euro zone into prolonged recession. This will have incalculable political consequences.”
A growing number of policymakers, as well as market economists, are convinced it is a matter of time before Greece, which keeps falling behind on its fiscal targets after two EU/IMF bailouts, will have to default.
Italy and Spain have come under pressure from bond markets over their large public and bank debts and weak growth, a cause for particular concern as both economies are too large to be saved by the European rescue fund that has been used in bailouts for Greece, Portugal and Ireland.
As well as preparing for a default and euro zone exit by those three “peripheral nations,” Soros recommends four bold policy measures:
- Bank deposits have to be protected to prevent bank runs in weaker states;
- Some banks in the defaulting countries have to be kept functioning to keep their economies afloat;
- The European banking system would be recapitalized and put under European-, as distinct from national-, supervision;
- Government bonds of other deficit countries would have to be protected.
“All this would cost money,” writes the 81-year-old hedge fund manager and philanthropist. “There is no alternative but to give birth to the missing ingredient: a European treasury with the power to tax and therefore to borrow.”
Soros acknowledges that such a move would require a new European Union treaty and urges European leaders to begin work straight away because of the time it would take to conclude.
“Once the principle of setting up a European Treasury is agreed upon, the European Council could authorize the ECB to step into the breach, indemnifying the ECB in advance against risks to its solvency,” he says.
“That is the only way to forestall a possible financial meltdown and another Great Depression.”
He also recognizes it would be deeply controversial, especially in Germany, where there is strong opposition to underwriting the debts of what are seen as profligate southern European nations.
“The German public still thinks that it has a choice about whether to support the euro or to abandon it. That is a mistake,” he writes.
“The euro exists and the assets and liabilities of the financial system are so intermingled on the basis of a common currency that a breakdown of the euro would cause a meltdown beyond the capacity of the authorities to contain.
“The longer it takes for the German public to realize this, the heavier the price they and the rest of the world will have to pay.”
(Reporting by Alex Richardson in Singapore)
http://www.reuters.com/article/2011/09/15/us-eurozone-soros-idUSTRE78E0II20110915?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_m
In
Below is a a chart of Italian bank equity performance. Countrywide bank run next?
Whether the reason for the sell off is due to a typoed GOFO 12M SocGen print or there is a fundamental reason, remains to be seen, but US equities are not taking the risk. US stocks have wiped out all of yesterday’s last minute gains.
DJIA:
http://www.zerohedge.com/news/italy-bank-update-dow-jones-wipes-out-entire-post-fomc-surge
Panic In Italy: FTSE MIB Down 6.2%, Biggest Drop Since May 2010
Remember when we said yesteday that the FTSE MIB won’t have a good day today? It isn’t…
The majority of today’s daily is devoted to Ranting Andy in the LeMetropole Café section. Don’t miss it. I have a few rants of my own, below.
Yesterday, Cactus Jack sent me an email. It was titled“Never sell America Short. God Bless America.” He sent me the link to a parade, recently held in Grand Rapids, MI where the town’s people came out in number singing and dancing in the streets to the song “American Pie.” The outing was a rebuttal to an article that implied the city of Grand Rapids was dying. Here is the link, if you are interested:
http://americandigest.org/mt-archives/american_studies/something_wonderful_ameri.php#014794
It was all very uplifting and amusing, but very, very naive.
Jack is a heck of a guy – he is a real optimist and a real American. He has lived his entire life, all 75 years of it, in affluence. He grew up with money, he made big money and his friends and family all live the high life. I can’t really fault him for seeing the bright side when that is all he has ever known.
I really want Jack to be right. I too love this great country. But a small group of very greedy and powerful men and women who populate Wall Street and Washington DC have set us all up for one massive failure. It is unfair to lay all of the blame on the bankers, brokers and politicians for without the indirect help of the masses, this could never have happened. The past several generations of Americans have allowed the American Dream to fade. I fear we have become a nation of under-educated, over-fed, lazy uninvolved people. Not everyone, but enough of the population to allow the current state of affairs to have happened.
Too many Americans refuse to get off their fat behinds and turn off Oprah or Judge Judy or Dancing With The Stars. Too many Americans honestly believe we can change things – all we have to do is vote for Obama. Or all we have to do is not vote for Obama. I’ve got news for you – Democrats or Republicans, Liberals or Conservatives, none of them have the answers anymore. All they care about is to spend enough of our tax dollars to stay in office, or get elected. We will get what we deserve. Those of us who do care, and even write about it, are greatly outnumbered by the masses that are addicted to their next welfare check, their super-sized McDonalds and their next trip to Wal-Mart.
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By Dean Henderson
If you want to know where the true power center of the world lies, follow the money – cui bono. According to Global Finance magazine, as of 2010 the world’s five biggest banks are all based in Rothschild fiefdoms UK and France.
They are the French BNP ($3 trillion in assets), Royal Bank of Scotland ($2.7 trillion), the UK-based HSBC Holdings ($2.4 trillion), the French Credit Agricole ($2.2 trillion) and the British Barclays ($2.2 trillion).
In the US, a combination of deregulation and merger-mania has left four mega-banks ruling the financial roost. According to Global Finance, as of 2010 they are Bank of America ($2.2 trillion), JP Morgan Chase ($2 trillion), Citigroup ($1.9 trillion) and Wells Fargo ($1.25 trillion). I have dubbed them the Four Horsemen of US banking.
Consolidating the Money Power
The September 2000 marriage which created JP Morgan Chase was the grandest merger in a frenzy of bank consolidation that took place throughout the 1990’s. Merger mania was fed by a massive deregulation of the banking industry including revocation of the Glass Steagal Act of 1933, which was enacted after the Great Depression to curb the banking monopolies which had caused the 1929 stock market crash and precipitated the Great Depression.
In July 1929 Goldman Sachs launched two investment trusts called Shenandoah and Blue Ridge. Through August and September they touted these trusts to the public, selling hundreds of millions of dollars worth of shares through the Goldman Sachs Trading Corporation at $104/share. Goldman Sachs insiders were bailing out of the stock market. By the fall of 1934 the trust shares were worth $1.75 each. One director at both Shenandoah and Blue Ridge was Sullivan & Cromwell lawyer John Foster Dulles. [1]
John Merrill, founder of Merrill Lynch, exited the stock market in 1928, as did insiders at Lehman Brothers. Chase Manhattan Chairman Alfred Wiggin took his “hunch” to the next level, forming Shermar Corporation in 1929 to short the stock of his own company. Following the Crash of 1929, Citibank President Charles Mitchell was jailed for tax evasion. [2]
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by Hon. Paul Hellyer
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 An Address to the International UFO Congress, Fort McDowell Resort, Scottsdale, Arizona, Saturday, February 26, 2011by Hon. Paul Hellyer, P.C. Former Canadian Minister of National Defence
The world financial system is a total fraud. It is one gargantuan Ponzi scheme, no better than the one Bernie Madoff used to swindle his friends and neighbors, and thousands of times worse if you add up the total number of victims it has ripped off over countless generations.
The principal difference between the two schemes is that Madoff was acting outside the law while the international banking cartel has persuaded generation after generation of monarchs, presidents and prime ministers to provide legislative protection for their larceny.
The banks Ponzi scheme is alarmingly simple. They lend the same money to several people or institutions at the same time and collect interest on it from each. What the banks really lend, however, is their credit, and what they take back in compensation for that privilege is a debt that must be repaid with interest.
The number of times they lend the same money is called leverage. The practice is as old as the hills but for our purposes we can start with the goldsmiths of Lombard Street in London, England, who accepted deposits for which they issued certificates redeemable on demand. They paid their depositors a nominal interest rate on the understanding that they could lend the money to their customers at higher interest rates. They soon found that they could lend more than they had in their vaults because only a few depositors came in to redeem their gold or silver at any one time. It was a scam. It was illegal. Nevertheless they got away with it for a long while and the scam was legitimized when the Bank of England was chartered to help King William finance his war. Rich people subscribed £1,200,000 in gold and silver, as capital, to found the bank, which then was lent to the government at 8 percent. To show his appreciation the King allowed the bank to print £1,200,000 in banknotes and lend them at high interest rates. In effect, the bank was allowed to lend the same money twice – once to the government and once to the people.
Over the years, due to the avarice of the banks and the complicity of the politicians, that ratio has increased dramatically. In the early days of the 20th century, federal chartered U.S. banks were required to keep gold reserves of 25 percent. That means they were allowed to lend the same money four times. I remember when Canadian banks were required to maintain a cash reserve of 8 percent. That means they were allowed to lend the same money 12½ times.
Today, thanks to Milton Friedman’s irrational flip-flop from being a proponent of 100% cash reserves to the opposite extreme of zero reserves, and the adoption of his ideas by the major central banks of the world in 1974, multiples have increased dramatically – in some cases to as much as 20 to 1 or more. Banks only keep enough cash to meet day-to-day demands for those few customers who go in and request it, and consequently the fraud is virtually total.
The system works this way. Suppose that you want to borrow $35,000 to buy a new car. You visit your friendly banker and ask for a loan. He or she will ask you for collateral – some stocks, bonds, a second mortgage on your house or cottage or, if you are unable to supply any of these, the co-signature of a well-to-do friend or relative. When the collateral requirement is satisfied you will be asked to sign a note for the principal amount with an agreed rate of interest.
When the paperwork is complete, and the note signed, your banker will make an entry on the bank’s computer and, presto, a $35,000 credit will appear in your account which you can use to buy your car. The important point is that seconds earlier that money did not exist. It was created out of thin air – so to speak.
The banking equation is a species of double-entry bookkeeping where your note becomes an asset on the bank’s books, and the new money that was deposited to your account is a liability. The profit for the bank comes from the difference between the low rate of interest, if any, you would be paid on your deposit if you didn’t spend the borrowed money immediately, and the much higher rate you would be obliged to pay on your note – the technical term is “the spread.” |
Posted on 2011 02, 21 by duo
Yes, you.
And Trichet, and the rest of the Central Bank fools.
But especially you, Bernanke.
There’s dumb and then there’s really dumb. Let’s take a short walk back down history lane.
You were sure there was no housing bubble.
Then you were sure it wouldn’t pop.
Then you were sure when the subprime problem hit, that it wouldn’t cause a recession.
Then you were sure you had it under control with Bear Stearns’ hedge funds.
Then you were sure you had it under control with Bear Stearns itself.
Then you were sure it was under control with Lehman, even though you had to know Citibank and others were refusing their collateral in the repo market.
You were sure QE would support higher bond prices – and lower yields. The exact opposite thing happened.
You were sure QE2 would suppress long end yields. The exact opposite thing happened.
Oh yeah, you made excuses both times, but in fact you publicly said that in both cases the exact opposite thing would happen that did.
Now let’s look at what happened just today.
Oil went up almost $7 today for the WTI contract. For each dollar that crude oil rises, we transfer roughly $95 billion (estimates vary from $90-100) outside of the United States.
That’s a direct hit to GDP.
In ONE DAY the entire impact of your so-called “QE2″ was ERASED.
“And the great owners, who must lose their land in an upheaval, the great owners with access to history, with eyes to read history and to know the great fact: when property accumulates in too few hands it is taken away. And that companion fact: when a majority of the people are hungry and cold they will take by force what they need. And the little screaming fact that sounds through all history: repression works only to strengthen and knit the repressed.” – John Steinbeck – Grapes of Wrath
John Steinbeck wrote his masterpiece The Grapes of Wrath at the age of 37 in 1939, at the tail end of the Great Depression. Steinbeck won the Nobel Prize and Pulitzer Prize for literature. John Ford then made a classic film adaption in 1941, starring Henry Fonda. It is considered one of the top 25 films in American history. The book was also one of the most banned in US history. Steinbeck was ridiculed as a communist and anti-capitalist by showing support for the working poor. Some things never change, as the moneyed interests that control the media message have attempted to deflect the blame for our current Depression away from their fraudulent deeds. The novel stands as a chronicle of the Great Depression and as a commentary on the economic and social system that gave rise to it. Steinbeck’s opus to the working poor reverberates across the decades. He wrote the novel in the midst of the last Fourth Turning Crisis. His themes of man’s inhumanity to man, the dignity and rage of the working class, and the selfishness and greed of the moneyed class ring true today.
Steinbeck became the champion of the working class. When he decided to write a novel about the plight of migrant farm workers, he took his task very seriously. To prepare, he lived with an Oklahoma farm family and made the journey with them to California. Seventy years later the plight of the working class is the same. If Steinbeck were alive today he would live with a Michigan auto manufacturing family making a journey to fantasyland of green energy, where automobiles ran on corn and sunshine. The working class bore the brunt of the Great Depression in the 1930s and they are bearing the burden during our current Greater Depression. Steinbeck knew who the culprits were seventy years ago. We know who the culprits are today. They are one in the same. The moneyed banking interests caused the Great Depression and they created the disastrous collapse that has thus far destroyed 7 million middle class jobs. Steinbeck understood that the poor working class of this country had more dignity and compassion for their fellow man than any Wall Street banker out for enrichment at the expense of the working class.
Okies and the Land of Milk & Honey
“How can you frighten a man whose hunger is not only in his own cramped stomach but in the wretched bellies of his children? You can’t scare him–he has known a fear beyond every other.” – John Steinbeck – Grapes of Wrath
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