FedUpUSA

Archive for the ‘Bad loans’ Category

The Federal Reserve has been going back and forth with reporting from Bloomberg regarding the massive bailouts and loans made to the financial sector during the crisis.  What is rather astonishing is the ability to discuss trillions of dollars of loans made to largely irresponsible financial institutions with absolutely no oversight.  Like an angry couple on Maury Povich, only an objective outsider can see how dysfunctional the relationship has become.   All of this happened in the shadows.  What is more astonishing is a large amount of questionable assets that were shifted from bank balance sheets are still sitting comfortably in the balance sheet of the Federal Reserve.  This is not disputed.  Profits at banks are on the rise but it is hard to lose money when you have unlimited access to taxpayer bailouts and the ability to dilute the currency of the nation.  U.S. banks hold $9.7 trillion in deposits with a FDIC Deposit Insurance Fund (DIF) that currently has $7.8 billion.  Do the math on that one.

A glance of U.S. banking data

Here is a nice snapshot of U.S. banking data:

Source:  Bank Tracker

What is the most amazing fact is that over $9.7 trillion in deposits is backed by a measly $7.8 billion.  This is like trying to stop a hurricane with a paper napkin.  Most Americans are earning virtually nothing on their deposits at banks but what other options are available?  Should they enter the highly volatile and opaque stock market?  When a typical savings account is paying close to 0 percent it is hard to digest but the volatility of the stock markets for this entire year have rendered a nearly neutral result.  Even money market accounts have fallen strongly since the recession hit:

“The typical money market account is down over 80 percent since 2006.  It isn’t like inflation has suddenly disappeared or that our debt problems have gone away like dust in the wind.  To the contrary the economy has gotten much more mired in a stagnating funk.”

Banks are back at making profits but it is hard to lose when you have unlimited taxpayer bailouts:

Source:  FDIC

While the Federal Reserve was trying to cast doubt on the results published by Bloomberg, they failed to address the massive amount of “assets” that remain on their balance sheet.

Read the rest at My Budget 360

What you are about to read should absolutely astound you.  During the last financial crisis, the Federal Reserve secretly conducted the biggest bailout in the history of the world, and the Fed fought in court for several years to keep it a secret.  Do you remember the TARP bailout?  The American people were absolutely outraged that the federal government spent 700 billion dollars bailing out the “too big to fail” banks.  Well, that bailout was pocket change compared to what the Federal Reserve did.  As you will see documented below, the Federal Reserve actually handed more than 16 trillion dollars in nearly interest-free money to the “too big to fail” banks between 2007 and 2010.  So have you heard about this on the nightly news?  Probably not.  Lately Bloomberg has been reporting on some of this, but even they are not giving people the whole picture.  The American people need to be told about this 16 trillion dollar bailout, because it is a perfect example of why the Federal Reserve needs to be shut down.  The Federal Reserve has been actively picking “winners” and “losers” in the financial system, and it turns out that the “friends” of the Fed always get bailed out and always end up among the “winners”.  This is not how a free market system is supposed to work.

According to the limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the grand total of all the secret bailouts conducted by the Federal Reserve during the last financial crisis comes to a whopping $16.1 trillion.

That is an astonishing amount of money.

Keep in mind that the GDP of the United States for the entire year of 2010 was only 14.58 trillion dollars.

The total U.S. national debt is only a bit above 15 trillion dollars right now.

So 16 trillion dollars is an almost inconceivable amount of money.

But some other dollar figures have been thrown around lately regarding these secret Federal Reserve bailouts.  Let’s take a look at them and see what they mean.

$1.2 Trillion

A recent Bloomberg article made the following statement….

The $1.2 trillion peak on Dec. 5, 2008 — the combined outstanding balance under the seven programs tallied by Bloomberg — was almost three times the size of the U.S. federal budget deficit that year and more than the total earnings of all federally insured banks in the U.S. for the decade through 2010, according to data compiled by Bloomberg.

The $1.2 trillion figure represents the peak outstanding balance on these loans, not the total amount of all the loans.  On December 5, 2008 the “too big to fail” banks owed this much money to the Federal Reserve.  Many of them could not pay these short-term loans back right away and had to keep rolling them over time after time.  Each time a short-term loan got rolled over that represented a new loan.

$7.7 Trillion

Bloomberg is reporting that the Federal Reserve had made a total of $7.77 trillion in financial commitments to the big banks by the end of March 2009….

Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

But as mentioned above, a one-time limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act covered an even broader time period and revealed even more bailout loans.

According to the GAO audit, $16.1 trillion in secret loans were made by the Federal Reserve between December 1, 2007 and July 21, 2010.  The following list of firms and the amount of money that they received was taken directly from page 131 of the GAO audit report….

Citigroup – $2.513 trillion
Morgan Stanley – $2.041 trillion
Merrill Lynch – $1.949 trillion
Bank of America – $1.344 trillion
Barclays PLC – $868 billion
Bear Sterns – $853 billion
Goldman Sachs – $814 billion
Royal Bank of Scotland – $541 billion
JP Morgan Chase – $391 billion
Deutsche Bank – $354 billion
UBS – $287 billion
Credit Suisse – $262 billion
Lehman Brothers – $183 billion
Bank of Scotland – $181 billion
BNP Paribas – $175 billion
Wells Fargo – $159 billion
Dexia – $159 billion
Wachovia – $142 billion
Dresdner Bank – $135 billion
Societe Generale – $124 billion
“All Other Borrowers” – $2.639 trillion

This report was made available to all the members of Congress, but most of them have been totally silent about it.  One of the only members of Congress that has said something has been U.S. Senator Bernie Sanders.

The following is an excerpt from a statement about this audit that was taken from the official website of Senator Sanders….

“As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world”

So where is everyone else?

Why aren’t leading Republicans and leading Democrats crying bloody murder over this report?

This scandal should have been front page news for months when it was revealed.

But it wasn’t.

And Guess what?

Not only did the Federal Reserve give 16.1 trillion dollars in nearly interest-free loans to the “too big to fail” banks, the Fed also paid them over 600 million dollars to help run the emergency lending program.  According to the GAO, the Federal Reserve shelled out an astounding $659.4 million in “fees” to the very financial institutions which caused the financial crisis in the first place.

In addition, it turns out that trillions of dollars of this bailout money actually went overseas.  According to the GAO audit, approximately $3.08 trillion went to foreign banks in Europe and in Asia.

So why were our dollars being used to bail out foreign banks while tens of millions of American families were deeply suffering?

That is a very good question.

Also, it is important to remember that many of these bailout loans were made at below market interest rates, and this enabled many of these financial institutions to rake in huge profits.

According to a recent Bloomberg article, the big banks brought in an estimated $13 billion by taking advantage of the Fed’s below-market rates….

While the Fed’s last-resort lending programs generally charge above-market interest rates to deter routine borrowing, that practice sometimes flipped during the crisis. On Oct. 20, 2008, for example, the central bank agreed to make $113.3 billion of 28-day loans through its Term Auction Facility at a rate of 1.1 percent, according to a press release at the time.

The rate was less than a third of the 3.8 percent that banks were charging each other to make one-month loans on that day. Bank of America and Wachovia Corp. each got $15 billion of the 1.1 percent TAF loans, followed by Royal Bank of Scotland’s RBS Citizens NA unit with $10 billion, Fed data show.

So once the financial crisis was over, were adjustments made to the financial system to make sure that this type of thing would never happen again?

Of course not.

Today, the “too big to fail” banks are larger than ever.  The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011.

So now they are more “too big to fail” than ever.

But this is what happens when we allow unelected central bank bureaucrats to run our financial system.

Most Americans do not realize this, but the truth is that the Federal Reserve is not part of the government.  In fact, it is about as “federal” as Federal Express is.  The Federal Reserve has admitted that they are a privately owned institution in court many times, and you can see video of a Federal Reserve employee admitting that the Federal Reserve is privately owned right here.

The Federal Reserve is an out of control monster that is throwing around trillions of dollars whenever it wants to.  Nobody should be allowed to do this.  Nobody should be allowed to give bailouts to banks and corporations without the express permission of the U.S. Congress and the president of the United States.

This is a point that I made in my article yesterday.  The Federal Reserve decided this week that it is going to provide “liquidity support” to Europe.  If the American people do not like this move, that is just too bad.  We do not get a say in the matter.

Are you starting to understand why I keep pushing the idea that it is time to shut down the Federal Reserve?

Please share this information about the secret 16 trillion dollar Federal Reserve bailout with your family and your friends.

If we can get enough people to wake up, perhaps there is still time to change the direction that this country is headed.

The Economic Collapse

 
A Bloomberg report reveals that the U.S. government loaned banks $7.7 trillion in secret bailout funds at no interest and then borrowed the money back at interest.
 

A gentleman who has occasionally popped up on the forum unmasked himself the other day and was interviewed in the “mainstream media” — ABC News’ European desk.

ALBERICI: “How certain are you that UniCredit broke the law while you were there?”

JONATHAN SUGARMAN: “A hundred per cent certain and to use the Irish expression, ‘to be sure, to be sure’ that is why I brought in this London based IT company which had a very good reputation in Dublin and the result was pretty horrific because whereas the breach that I’d reported to the regulator was a breach of twenty per cent, whereas the permissible deviation was one per cent, they rang me up one evening soon after they tied into our systems, linked into our systems and said your breach is actually forty per cent”.

ALBERICI: When he raised the alarm with his chief executive, the response was dismissive. It was a systems error. The risk manager was instructed to continue approving the deals. Jonathan Sugarman was in the thick of a reckless banking culture that was on a collision course with disaster.

Everyone says that what is happening now in Italy with their banks, and with Irish Unicredit, was some sort of accident, just as the claim has been made that this was true in America.  But we have plenty of information that either is an admission or strongly suggests that there was nothing accidental about any of these events — that they were nothing more than a willingness by executives to overlook or even intentionally bury bad conduct simply to rob the taxpayer by taking risks they knew they could manage to foist off on everyone when — not if — their institutions blew up.

The worst of this is that it’s still going on!

JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS), among the world’s biggest traders of credit derivatives, disclosed to shareholders that they have sold protection on more than $5 trillion of debt globally.

Just don’t ask them how much of that was issued by Greece, Italy, Ireland, Portugal and Spain, known as the GIIPS.

As concerns mount that those countries may not be creditworthy, investors are being kept in the dark about how much risk U.S. banks face from a default. Firms including Goldman Sachs and JPMorgan don’t provide a full picture of potential losses and gains in such a scenario, giving only net numbers or excluding some derivatives altogether.

Got that?  JP Morgan has a market cap of $124 billion while Goldman has a market cap of about $50 billion   Both have less than a trillion of balance sheet size.  Between them they have more than twice their balance sheet in credit exposure and well more than 20 times their market cap in written credit protection.

This is ridiculously dangerous and the obvious question is “how in the hell can you possibly do that?”

The answer is that we learned nothing and have refused to end “too big to fail”: As a consequence these institutions are still playing “heads we win and keep the money, tails the taxpayer loses.”

And lose we have.  We’ve lost jobs, we’ve got the government presenting roughly 10% of the economy in borrowed money and thus creating false demand that does not actually exist in the economy and our Congress continues to chug along trying to argue over whether they will increase spending by $200 or $500 billion a year.  There has been zero reckoning against the facts presented here:

This cannot work over the intermediate or longer term and yet this is what we’re continuing to try to do!

The entire world is caught up in a gigantic Ponzimania but the world’s demand for pretty colored candy-emitting unicorns will not make them appear as unicorns are mythical creatures.

Nobody — simply nobody — is dealing with this in an honest fashion.  Neither side of the aisle will put a stop to it, despite it being factually certain that it will blow up in our faces.  As nations in Europe teeter on the brink of disaster we find that once again our financial institutions have levered up and hidden their exposure — it is just a matter of time before we start hearing “nobody could have seen it coming” again.

We must stop this and start applying handcuffs to these people, not coddling them.

Then there’s Congress and the blatant insider trading that they engage in.  While it has been argued that this is technically legal there’s a new law review paper out that argues the opposite – that this practice is a black-letter criminal and civil violation of the law.  The argument is quite persuasive too — but who’s going to appoint the special prosecutor and start cuffing Congressmen and women (like, for example, Pelosi?)

Oh please.  That will happen only when “Occupy Wall Street”, The Tea Party or both together decide they’re going to “occupy” Washington DC and refuse to leave until the indictments issue.

For those on the right who say that “OWS” is wrong and a bunch of freeloaders while they’re the “rule of law” group: That above paper contains all you need to demand that every member of Congress involved in this practice go straight to prison and that an immediate felony investigation take place right now — and to find a lawful and peaceful means to force the investigation to take place.

Folks, it’s really quite simple: We’re to the point where either we, as a nation, stand up and insist that the raw corruption stop or we will not have an economic recovery, we will not have jobs, and we will not resolve the fact that we have a handful of financial institutions that four years on are still holding our nation (and the rest of the world) and every individual living on the planet hostage.

I see no evidence of a willingness to deal with the facts in DC, in Brussels or anywhere else.  At its most-basic level the underlying financial fact is this: You cannot spend more than you take in over the intermediate and longer term.  The mathematical fact of exponential growth makes attempting to do so impossible.

It is this attempt and the utter refusal to face that fact that has underlay all of the mess that we find ourselves in – both here in the United States and internationally.

There is only one question remaining: Will we cut it out before or after our entire economy collapses?

A 3,000 to 1 shot, Wall St. took it, collected billions in
bonuses, blew it and you paid for it.

Before 2008, how Too Big to Fail Banks’ hidden
3,000 times leverage rigged the Real Estate market and defrauded EVERY mortgage
borrower and many others…

This article disabuses the notion that “deadbeat borrowers” caused the financial crisis.  And offers an  answer to the question that still lurks in the mind of every American; whether black, white, native American, asian or  Hispanic; whether educated or not; whether English, Spanish, or Mandarin speaking.

Taking a big step back, and looking at it like a business process:  “How could so many Americans ALL have made the same ill-advised mortgage borrowing decisions?”  The answer lies in what did they ALL have in common…

It was all about leverage

What is leverage?

Leverage is a way to control more of something when you can’t pay for it in full.  We do it all the time; when we buy a car – except few of us actually buy the car, we finance it or lease it.  We also do it when we buy a house – except almost no one pays cash for a house, we finance the purchase with a loan; it’s secured by a mortgage on the property.

Example of 5 times leverage:

When we buy a house and put 20% down, we buy a house worth 5 times as much as the down payment.  If we put $100 thousand down we can buy a house worth $500 thousand.  $500 thousand divided by the $100 thousand we put down equals 5 times leverage.

100 times leverage:

By the same calculation ZERO down mortgages were suffice it to say, 100 times leverage, it’s actually more but that’s a discussion for later.   Repeat after me, no money down mortgages equal 100 times
leverage.

(Click for Sharper Image)

Who controlled and approved EVERY leverage decision?

Leverage Approval #1 by:

TBTF Banks (ultimately) approved every one of these loans and bundled thousands of others like them initially into mortgage backed securities (MBS).

Leverage Approval #2 by: [the key, little known fact]

In the past, TBTF Banks used to sell them off (remember that word) to investors like mutual funds, insurance companies and pension plans.  In the 2000’s TBTF banks issued almost $17 Trillion of MBS, but did not sell all of them OFF to 3rd parties.  They held massive amounts of them to turbo-juice their bonus checks in a 2nd set of books (legally) in OFF balance sheet, special purpose entities.  As a refresher Enron did the same type of thing.

In the decades, make that for over 60 years before the 2000’s TBTF banks’ leverage was around 12 times; however when they concealed trillions worth of MBS – their leverage increased to over 30 times.

Remember 5 times leverage?  It was based on how much the house was worth right?

And when TBTF banks add more leverage on top of the borrower’s leverage we don’t just add it – we ______? You guessed it – we multiply it.

3,000 times leverage on house prices:

100 times leverage on the borrowers side times 30 times leverage on the TBTF banks’ side is 3,000 times leverage ON house prices.

Lather, rinse and repeat – 100 times 30 equals 3,000 times leverage.  Lather, rinse and repeat

100 times 30 equals 3,000 times leverage.

Remember what I first told you about leverage?

Leverage lets you (or TBTF bank) control something that you can’t fully pay for.  Well the TBTF
banks’ way of financing them in the Asset Backed Commercial Paper market began to dry up in August 2008, so they couldn’t pay for these assets.   This is the direct cause (but not the root) for the Fed and US Treasury to (have to) step in and pay CASH for them in the bailouts of 2008, and again in 2009, and again in 2010 and yet again 2011 via the Fed’s QE trifecta to the tune of over $20 Trillion dollars.

The interactive portion is about to begin:

Is it any surprise that the assets backing the commercial paper were ________? You may have guessed it – MBS.

Is it any surprise that the Fed created a new category to track ABCP in_______? You would be correct if you guessed 2006; just two swift months after Ben Bernanke was appointed chairman of the Federal Reserve by President Bush.

Is it just a random coincidence that almost $17 Trillion of Mortgage Securities were created by TBTF banks from 2001 to 2008?

What was that word I asked you to remember?

Oh, right it was OFF.

When TBTF banks’ CEOs, executives or prop traders got their year end bonus check did we hear reports that anyone said it was OFF (or that it was too much)?  Nope.

Yet even the erudite, indeed veritable student of the Great Depression, Chairman of the Federal Reserve, Ben Bernanke in October 2007 was unaware of (just a few days after the stock market peaked at 14,087 as measured by the Dow Jones Industrial Average) what the TBTF Banks were really up to when he entertained the NY Economic Club.  See “One year, One Trillion Dollars; the education of Ben Bernanke 2007 to 2008…” Fiduciary in thought and action: One year, one Trillion dollars; the education of Ben Bernanke from 2007 – 2008…(since there appeared no news report that any of the luminaries of the NY Economic Club questioned Mr Bernanke we assume they all understood and agreed with his distinguishing point.  I only wonder was that before or after they might have cashed a bonus check based on…LEVERAGE.)

Yup and we paid for it then and continue to pay their salaries, benefits like paid vacations, health care (non-taxable) even now – silly us.

The top 12 reasons + one

TBTF banks, before 2008 created a hidden, secret “market” for MBS:

1. As stated above TBTF banks changed from financial intermediaries into speculators via their proprietary (for the house only) trading desks;
2. Hiding (the FDIC used the word “concealed”) trillions of MBS off balance sheet;
3. Allowing their own internal prop traders to value #2  (legal under the SEC’s 2004 Consolidated Supervised Entity (CSE) program) despite the fact few if any, of #2 had EVER seen the light of any “market” trade as one between arms-length parties;
4. Why? To maximize same prop traders’, managers’ and CEOs’ cash bonus checks;
5. All based on the assumption (almost a religious belief) that national median home prices had NEVER gone down – true, as you may recall;
6. BUT the past was under a 60 times house finance, prudently underwritten leverage regime (20% down payments, verified job, income, assets and 12 times bank balance sheet leverage);
7. TBTF Banks’ single handedly created 3,000 times leverage on house prices, the underlying collateral of any MBS, CDO, etc.;
8. 3,000 times leverage is the product of Zero down loans; 100 times leverage for the borrower and 30 or more times TBTF bank on and off balance sheet leverage;
9. Mr Bass testified to the FCIC in January 2010 that TBTF banks’ leverage at the end of 2007 – yes end
   of 2007 (see page 13) shows almost all TBTF Banks were over 30 times, Citigroup at 68 times leverage; meant an adverse swing (in the value of the underlying collateral or obligations) of as little as 1.5% wiped them out completely – insolvent;
10. And we know that leverage worsened in 2008…and we know from Goldman Sach’s 2007 to 2008 collateral call dispute with AIG that MBS valuation marks (not even CDO’s) were south of 90;
11. It’s not about Fannie or Freddie either; they were downstream of information from the TBTF banks – again TBTF banks held trillions of MBS, in secret OFF balance sheet; I’m not saying it was necessarily illegal but it was fraudulent; as it was knowing, willful and intentional fraud upon the other side to the mortgage – the borrowers. And it only went on as long as it did – BECAUSE they were hidden;
12. And we know it’s not about CRA as home ownership peaked in 2004 nor can we blame it on the variant of “homeownership for all” as just a few too many houses were not primary residences but 2nd, 3rd, 4th and 5th homes and condos – each time the loan was approved (ultimately) by TBTF banks;
13. Last, 3,000 times leverage on home prices represents a 50 fold increase over the 60 times historical norm; more importantly shows that TBTF Banks’ violated requirements of their banking charters; i.e. to operate according to “safety and soundness”.

*Except borrowers who falsified their loan apps.

How could EVERY American mortgage borrower ALL have made the same mistake?

1)  Every mortgage loan was (ultimately) approved by?

2)  Every mortgage loan was securitized by?

3)  Massive amounts of securitized loans were held for speculation by?

4) Thousands of off balance sheet and or off shore entities were created by?

5)  Massive amounts of #3 were held off balance sheet by?

6)  The 2004 SEC CSE program was lobbied for by?

7)  Models, not markets were used to value off balance sheet holdings by?

8)  Hundreds of billions of customers’ money market funds  were diverted to affiliated banks known as industrial loan companies by certain?

9)  Massive dollar amounts of leverage were employed by?

10) Massive (greatly increased by hidden leverage) bonus checks were paid by?

11)  Assets held off balance sheet were not timely, fair valued by?

12)  Massive amounts of Fed and US Treasury aid were received by?

13)  LSD used by?

* TBTF Banks on LSD indeed; massive amounts of Leverage, Swaps and Derivatives.

A “Financial Crisis” approved, securitized one loan at time and brought to you by your friendly neighborhood TBTF Bank on LSD; one they prefer to still keep secret…

By the way, there was no need to create vast bodies of new laws except to require all securities and derivatives to trade on open, disclosed markets with independent clearing agents; just like stocks have traded on the NYSE for decades.

Chris McConnell AIFA®, Accredited Investment Fiduciary Analyst™ - is an expert on the securities industry and markets with over 28 years experience dealing with accounting, leverage and compensation issues.  He has an economics, accounting and fiduciary background.  McFid, BFD Expert™ since 2003.  To visit his website Fidiciary Forensics.

Author’s Note: 3,000 times leverage is an estimate as not all mortgages were zero down; just several million too many; not to mention “every app was approved” underwriting.  But we do know that 60 times leverage (on house price) was the norm for decades; also called safety and soundness; and we also know that TBTF banks’ leverage, assuming their year end 2007 marks were accurate, when the 2007 to 2008 Goldman AIG dispute timeline triangulated with Mr Blankfein’s 2010 testimony to the FCIC suggests otherwise, are understated – correct understated.  And we know that marks worsened (and caused leverage ratios to increase in 2008).  Again, the pressing need for CASH infusions from the Fed, UST in 2008/9, and kinder, gentler accounting treatment courtesy of the SEC/FASB

Discussion (registration required to post)

Are Americans starting to come together?

The video linked below provides a glimpse of why we are not a free nation, but also, how we can be free if we play our cards right and at least temporarily stop the artificially induced hostilities between Democrat and Republican voters.

Bill Still explains how the international bank cartel controls our government, just as they do the rest of the world. You and I, on either side of the political divide, no longer have a say in any major decisions.

Remember the first “bailout” bill (TARP), which was signed by Obama and Bush simultaneously on national TV?

That signing was symbolic of the signing away of our sovereignty by both parties, which actually had happened long before that, as marked by the creation of the Fed in 1913.

I recall it as if it were yesterday, that when the TARP bailout was being discussed, congress reported receiving a record number of phone calls and almost all of the callers (of both parties!) begged their legislators not to sign the bill that charged the public with the disastrous policies of bankers and rewarded them for doing the wrong thing.

Yet, despite this almost overwhelming political pressure from the now-disenfranchised American people, the majority of legislators went ahead and passed the bill, proving that their loyalties were not to you, but to shadowy powers higher up.

Bill Still provides the most plausible reason for that incredible dissonance between what we wanted and what the Banking Oligarchy wanted. The banks control the nation and the world, and the banks in fact control the Fed, not the other way around.

But as Bill also shows, there is a glimmer of hope on the horizon. The model for that hope is the State bank of North Dakota, the state with the lowest unemployment and the only State owned bank. It’s not a coincidence.

There is a clue: employment depends on a sound financial and monetary policy.

Here is a brief explanation of the North Dakota state banking system and why it is a model for other states:

http://prorev.com/2009/03/how-north-dakotas-banking-system-could.html

And here is a report on the Utah Monetary Declaration, another attempt to break away from slavery to the Fed:

http://beforeitsnews.com/story/1168/277/States_to_Financially_Break_Away_from_Federal_Government—Utah_Monetary_Declaration.html

Finally, let me point out something that is absolutely key:

As I have said before, the Oligarchy (Ruling Class) has been able to successfully manipulate the people by cleverly dividing us into two main camps, each with its own vested interests, created by politicians to divert attention from the wizard behind the curtain.

The Republicans created a paradigm to counter the establishment of bank regulations by falsely stating that the banks were part of the free market system and needed “freedom” to operate. If that were actually true, then they would be right, but it was a big lie. As Reagan discovered when he tried deregulation, the banks are guaranteed to a large extent by the Federal government, so they are in some ways immune to failure. That is, a deregulated bank can destroy itself by issuing bad loans, but the government is there to pick up the pieces – by insuring clients at tax payers’ expense. In the Savings and Loans scandal, Reagan had forgotten that fact. He portrayed banks as free market capitalists when in fact they were part of a Private Public Partnership (PPP). So when banks went kaplooey, we the tax payers paid the bill.

So Republicans hate regulations due to a misperception of banks as carriers of sacred capitalism.

On the other hand, Democrats oppose regulations too because they want banks to finance their socialist schemes and this can be best accomplished by unregulated banks in the hands of ideologues dedicated to wealth redistribution – with the proviso that the ideologue bankers get rich implementing it.

By creating and tending these two narratives, the oligarchs have been able to maintain their grip on our finances and money supply.

But now it appears both right and left may be waking up. The treachery isn’t so hard to see now that so many are out of work and people see the huge national debt that will never be paid down.

It was a Democrat president, Andrew Jackson, who broke the backs of the banks, after banking oligarch  Nicholas Biddle brazenly threatened to cause a depression, and then did so, showing that the banks would not shrink from deliberately harming the public to get their way – something they have never ceased doing, acting as a shadow government in the so-called Land of the “Free,” and ultimately bringing down the world economy with the cooperation of both political parties in America and of the EU.

Now, ironically, many Americans who really care about the poor and middle class – beyond mere lip service – are aligned with the Tea Party, and their ideas square perfectly with Democrat Andy Jackson’s. Yet thanks to a strong cognitive dissonance syndrome induced by powerful propaganda efforts, Democrat voters have been trained to shun this group. But, equally ironically, many Democrats support the Occupy Wall Street movement, which is based in part on the proposition of freeing the people from the oligarchs (though with the focus, for example, on race instead of the proposition that all Americans are targeted equally by the Ruling Class).

Thus, in their respective ways, both sides seem to have glimpsed a common enemy, and the old taboos against controlling the banks — taboos on the left and differently-motivated ones on the right — are starting to crack.

If the light should ever go on in the minds of We the People of both parties – and there is no reason to assume it can’t, regardless of the propaganda efforts of both sides of Tyranny – then it will be the bankers’ turn to be afraid.

They will have nowhere to hide.

Further reading:

This Financial Mess – Causes and Cures

“The president of the Second Bank, Nicholas Biddle, was quite candid about the power and intention of the bank when he openly threatened to cause a depression if the bank was not re-chartered.”

By Don Hank – Laigles Forum