The Feds $16 Trillion Back-door Bailout

So there we have President Obama expressing guarded support for the Egyptian people in their uprising against those corrupt, entrenched interests, while at home, he’s unable to do terribly much about interests like JP Morgan Chase. For one thing, they’ve got the government pretty well sewn up. Not bad to have an executive from your bank (Bill Daley) recently appointed as the president’s Chief of Staff, and to have your bank’s CEO (Jamie Dimon) on particularly friendly terms with the Treasury Secretary. It’s not just Chase. Along with Deutsche Bank, UBS was yet another bank having known about and done nothing about Bernie Madoff. That bank is so close with Obama it goes on vacation with him. If we’re going to stop being hypocrites, we have to apply the same standards to rotten institutions wherever they are. - Russ Baker, Giving Chase: Egypt, OK – But What About America’s Oligarchs?, LewRockwell.com, February 14, 2011

Derivatives: The Real Reason Bernanke Funnels Trillions Into Wall Street Banks

February 8, 2011

Seeking Alpha - We’ve been over the numerous BS excuses that US Dollar destroyer extraordinaire Ben Bernanke has made for QE enough times that today I’d rather simply focus on the REAL reason he continues to funnel TRILLIONS of Dollars into the Wall Street Banks.

I’ve written this analysis before. But given the enormity of what it entails, it’s worth repeating. The following paragraphs are the REAL reason Bernanke does what he does no matter what any other media outlet, book, investment expert, or guru tell you.

Bernanke is printing money and funneling it into the Wall Street banks for one reason and one reason only. That reason is: DERIVATIVES.

According to the Office of the Comptroller of the Currency’s Quarterly Report on Bank Trading and Derivatives Activities for the Second Quarter 2010 (most recent), the notional value of derivatives held by U.S. commercial banks is around $223.4 TRILLION.

Five banks account for 95% of this. Can you guess which five?

Looks a lot like a list of the banks that Ben Bernanke has focused on bailing out/ backstopping/ funneling cash since the Financial Crisis began, doesn’t it? When you consider the insane level of risk exposure here, you can see why the TRILLIONS he’s funneled into these institutions has failed to bring them even to pre-Lehman bankruptcy levels.

Ben Bernanke is a stooge and a fraud, but he is at least partially honest in his explanations of why he wants to keep printing money. The reason is to try to keep interest rates low. Granted, he’s failing miserably at this, but at least he understands the goal.

Of course, Bernanke tells the public and Congress that the reason we need low interest rates is to support housing prices. He doesn’t mention that $188 TRILLION of the $223 TRILLION in notional value of derivatives sitting on the Big Banks’ balance sheets is related to interest rates.

Yes, $188 TRILLION. That’s thirteen times the US’ entire GDP, and nearly four times WORLD GDP.

Now, of course, not ALL of this money is “at risk,” since the same derivatives can be traded/spread out dozens of ways by different banks as a means of dispersing risk.

However, given the amount of money at stake, if even 4% of this money is “at risk” and 10% of that 4% goes wrong, you’ve wiped out ALL of the equity at the top five banks.

Put another way, Bank of America (BAC), JP Morgan (JPM), Goldman (GS), and Citibank (C) would CEASE to exist.

If you think that I’m making this up or that Bernanke doesn’t know about this, consider that his predecessor, Alan Greenspan, knew as early as 1999 that the derivative market, if forced into the open and through a public clearing house, would “implode” the market. This is DOCUMENTED. And you better believe Greenspan told Bernanke this.

In this light, all of Bernanke’s monetary policies and efforts are focused on doing one thing and one thing only: trying to shore up the overleveraged, derivative-riddled balance sheets of the Too Big to Fails, or Too Bloated to Exist, as I like to call them.

The fact that the bank executives taking this money and using it to pay themselves and their employees record bonuses only confirms that these folks have NO interest in taking care of shareholders or their businesses. They’re just going to take the money and run for as long as this scheme works.

I don’t know when this will come unraveled. But it WILL. At some point the $600+ TRILLION behemoth that is the derivatives market will implode again. When it does, no amount of money printing will save the Too Bloated To Exist banks’ balance sheets.

At that point, it’s game over for Wall Street and the Fed.

The Feds $16 Trillion Back-door Bailout - the Biggest Scam in World History

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February 9, 2011

Dr. Mercola - The greatest scam in history has been exposed -- and has largely been ignored by the media. In fact, it’s still going on.

The specifics of a secret taxpayer funded “backdoor bailout” organized by unelected bankers have been revealed. The data release revealed “emergency lending programs” that doled out $12.3 trillion in taxpayer money ($16 trillion according to Dr. Ron Paul) -- and Congress didn’t know any of the details.

According to the Public Record:

“The Federal Reserve was secretly throwing around our money in unprecedented fashion, and it wasn’t just to the usual suspects like Goldman Sachs, JP Morgan, Citigroup, Bank of America, etc.; it was to the entire Global Banking Cartel.

To central banks throughout the world: Australia, Denmark, Japan, Mexico, Norway, South Korea, Sweden, Switzerland, England ...

We are talking about trillions of dollars secretly pumped into global banks, handpicked by a small select group of bankers themselves. All for the benefit of those bankers, and at the expense of everyone else.”

Sources:
The Public Record December 10, 2010
Video Transcript

Dr. Mercola's Comments:

I recently had the pleasure of interviewing Congressman (TX) Dr. Ron Paul about these secret "backdoor bailouts" that amount to a staggering $16 trillion. (To get a better idea of just how much money this is, see What Does a Trillion Dollars Look Like?)

An AMAZING fact: The Federal bailout is more than the cost of the First World War, the Second World War, the Korean War, the Vietnam War, Marshall Plan, the New Deal, the Invasion of Iraq, and landing on the moon COMBINED!

And, with this bailout Obama has nearly created more debt than ALL the previous presidents COMBINED.

Dr. Paul is now the Chairman of the Congressional subcommittee overseeing the Federal Reserve, which as you may know, is a private entity yet largely responsible for our economic policies.

The Federal Reserve has now handed out multi-trillion dollar bailout packages to banks and big industries, and now, finally, people are starting to demand to know where all that money actually went—which is largely how Dr. Paul came to be the Chairman of this subcommittee in the first place.

To get answers, Dr. Paul, along with his son, has introduced legislation to enable an audit of the Federal Reserve. When asked what he thinks the audit might reveal, he says:

"The reason to have an audit is to find out what they're hiding. The information they're most protective of are the details of where many trillions of dollars used in the bailout went, and what the collateral was."

The Federal Reserve has also been extremely protective of information dealing with foreign central banks. However, according to Dr. Paul, preliminary figures show the Federal Reserve has engaged in some $16 trillion-worth of transactions, one-third of which were with banks overseas.

As Dr. Paul points out, there's no doubt that foreign banks have been major recipients of Federal Reserve funds.

"We want to know the details of what the agreements were," Paul says, "and whether any of that money will be recouped."

He also points out that an audit could reveal information that no one ever dreamed of, that the Federal Reserve never thought they'd be forced to reveal.

Why Everyone Needs to Educate Themselves about the Federal Reserve

People in general have been largely ignorant of how the Federal Reserve and our monetary- and economic system works, which has given them more or less free reign to run the show any which way they pleased. Fortunately, people are starting to catch on as the financial collapse brought the issue front and center.

At that time, many began to investigate and educate themselves further to understand what was happening.

Still, the conventional media have virtually ignored many of these issues, particularly the issue of international banks being on the receiving end of trillions of dollars of bailout money, which Public Record has dubbed "the biggest scam in world history."

Why is this?

According to Dr. Paul, part of the problem is that the media simply do not understand the issues involved. But the media is also a tightly interwoven part of the management of the United States, and sometimes they simply do not want you to know exactly what's going on.

However, "we do need to give media some credit," Dr. Paul says, stating that both Bloomberg and FOX filed lawsuits under the Freedom of Information Act to get information about where the bailout money went.

Hopefully, if we all rally together and do our part, Congressman Paul's legislation will come to pass and a much needed audit of the Federal Reserve will be done. It will require a coordinated effort by as many people as possible however, as the Federal Reserve will fight tooth and nail to stop it.

Sovereignty is Key

Ron Paul does not worry about how we might abolish the Federal Reserve.

"It will self-destruct," he says.

Rather, he worries that they'll simply "patch" the old system with an international currency that we would have even less control over.

So, what's the answer?

"I think the only thing that can protect our sovereignty and sound currency is to make sure enough people know and understand the issue, and demand that we once again become a sovereign nation," he says.

Ron Paul has Introduced Legislation to Opt Out of Government-Run Health Care Plan

Another important piece of legislation introduced by Dr. Paul is a bill that would allow you to opt out of the government-run health care plan without facing stiff fines for refusing to purchase health insurance.

"That way, no matter how bad our system gets, if we have a chance to opt out, it at least gives us some hope," he says. "Hopefully we can just remove the mandate..."

He also suggests expanding medical savings accounts, and offering tax breaks for medical spending. I believe he's right when he says that allowing people to take care of their own health without resorting to government-run options only will reduce the burden on the system.

"If we don't, the system will collapse," he says. "No one will have reasonable health care. Costs will go up, doctors will quit, and medical quality will go down."

He believes that an opt-out option "might be something President Obama may be forced to accept."

I hope so. There are still serious questions about whether or not mandating the purchase of health insurance is even constitutional.

A federal judge in Florida recently ruled that the individual mandate (the part of the law that forces you to purchase health insurance for yourself and your family) is unconstitutional, CNN reported on January 31. However, other judges have already ruled it constitutional, so the matter will now go to the US Supreme Court.

Should the Supreme Court decide that it violates the constitution, then it may have to be repealed. If they don't, then Dr. Paul's legislation would be of vital importance to provide you an option.

How YOU Can Be Part of the Solution!

In this interview, Dr. Paul reaffirms that numbers do matter when it comes to pressuring elected officials into action. Once a politician becomes convinced that it's in their political interest to do something, they will act. So the key is coordinated and organized communication efforts with your Congressmen and other elected officials.

As Dr. Paul says, "they like their jobs." And if they're suddenly bombarded, not by tens but by thousands of their constituents, then the political reality is they're forced to make a choice between keeping their post or satisfying lobbyists. If their voters are silent, then it's easy to be swayed by lobbying groups. But if their jobs are on the line, it's a different story.

I realize very few people take any pleasure whatsoever in getting politically active and involved, but it's quite clear that politicians and large corporate interests have run amok for too long without sufficient feedback and involvement from the people. It's time to re-engage and pay attention to what your elected officials are doing.

Dr. Paul suggests that health groups start to work together in a coordinated fashion with a clear goal in mind, such as supporting a particular piece of legislation.

If you're feeling motivated you can even start a grassroots campaign on your own. The key is to get large numbers of people, to bring a loud and clear message to your elected officials. Last year I posted a helpful ten-point guide to organizing at the grassroots level, created by the director of Californians for Green Dentistry, Anita Vazquez Tibau. These tips are useful for any type of grassroots organization, so here they are again.

Organizing at the Grass Roots Level -- 10 points for Success

1. Be passionate!

The first element for success is unbridled passion for your cause. People get involved with an issue because they or their loved ones have been affected. Do what you love and love what you do.

2. Become an expert.

Whoever is chosen to become a spokesperson for the cause must absolutely become an expert on the topic. Anything less could become a detriment to the organization. Know your organization and never stop learning and growing.

3. Research – research – research!

Research the cause of the problem; people who are most affected by the issue; and the experts who know and understand the cause. Beware that you must find legal experts as well. Use your contacts and create a database.

Also know who is your opponent – you will not be successful unless you can defeat your opponent.

4. Think about who you should target for support on an issue, and how.

Align yourself with other likeminded groups so that you can become a stronger organization. Also remember that people are more likely to support your cause if you present yourself professionally – believe it or not, doors will open faster if you solicit support in business attire.

5. Petition – Petition – Petition!

If you are able to describe your cause in a sentence or two, people are more likely to help. You need a sales pitch! This becomes your mantra for the organization and builds brand recognition. For example Charlie Brown coined the term – "Say the "M" Word"…People would then be curious and ask "What is the "M" word?" and we would explain that it's about mercury…

One of the problems your may encounter is where to find a location to gather signatures. Look for locations that may be open to your cause, then contact the manager at the store/location to see if you can set up an information table. Some businesses may not allow petitioning whereas others can be extremely helpful.

Once they say yes, it helps to personally meet the manager and establish a positive working relationship. Again, professionalism is key, and so is appearance.

Another great avenue for spreading the word is through social media such as Facebook, Twitter and MySpace. Non-profits are constantly fund-raising and these avenues are free! Consumers for Dental Choice placed a petition online with tremendous success.

6. Plan events to raise awareness.

Once you've built a solid base of support, start planning events to build awareness around your cause. Look to your sphere of influence – people that you have met that can support your cause.

When it is press related – visuals are a must! Signs carry a message, and visuals are powerful.

7. Look for win-win situations.

Look for local businesses that can benefit by the exposure of helping you. For example, businesses that will carry your message by letting their clients sign your petition, while getting recognition through your organization in return. In essence they become stakeholders in your cause. Use local platforms as educational tools about your issue.

8. Identify allies in city government.

Once you have garnered enough support, research and identify allies in the city government who will be sensitive to your issue.

9. Remember common courtesies.

Always thank those who help you, and be sincere. A heartfelt thanks goes a long way, and it is best to say thank you in writing.

10. Stay positive!

Remember, when the going gets tough. the tough get going. Never give up hope -- that is all you have, so have faith in what you do. We will always win if we don't quit!

Final Thoughts

We're facing many problems these days. Both the economic system and the health care system are fatally flawed and broken.

It's quite clear to me that the health care bill will do absolutely nothing to improve the health of Americans. And it would be a travesty to force all of those who WANT to take an active role in their health by implementing lifestyle changes to purchase health insurance that will not support anything but the conventional drug paradigm.

Fortunately Dr. Paul also understands the value of lifestyle in creating true health. Even with our hectic schedules we make time for exercise nearly every day. Dr. Paul walks two to three miles on most mornings, and rides his bicycle for about 10 miles in the evening, stating he values this time not just for its heart and lung benefits but also for the mental relaxation and stress relief it provides.

But despite these problems, it's important to recognize that you do have power. You have the power to take control of your own health and improve your lifestyle, for starters. And, when your voice is combined with that of others, you have the power to sway politicians and incite beneficial change.

Ron Paul Monetary Hearing: You Are Invited

February 7, 2011

Llewellyn H. Rockwell, Jr. - The historic first hearing of Chairman Ron Paul’s monetary policy committee, to expose the Fed as the prime creator of unemployment and so much human suffering, will take place at: 10:00AM on Wednesday, February 9, 2011, in Room 2128 of the Rayburn House Office Building, the main hearing room of the Financial Services Committee. The witnesses include the eloquent Austro-free-market stars Thomas DiLorenzo of Loyola College and Richard Vedder of Ohio University.

The Fed itself, and at least three big banks, lobbied against Ron’s chairmanship. Republicans who share their fear of the truth worked with Paul Ryan, chairman of the “Budget” Committee, to schedule hearings with Bernanke at the exact same time as Ron’s, to try to diminish the significance of Ron’s.

Ryan, btw, is the fair-haired boy of the Republican leadership who gave the boring response to Obama’s boring State of the Empire Address. Like the Republican leadership, Ryan talks about cutting spending, but that is only a ruse. Ryan is a big-government neocon, and so naturally supported TARP, Bush’s prescription drug welfare, his wars, and the empire.

I don’t believe this insider trick will work against Ron, because his support comes not from the regime or the Republican leadership, but from the grassroots. I think the Paulians will pack Ron’s hearings, and not only to show their support for him against the power elite.

These hearings will have huge significance in the fight against the Fed, the fractional-reserve banksters, and other destroyers of our prosperity and freedom. It will also be a lot of fun!

2/9/11 UPDATE: CSPAN is not broadcasting Ron Paul's hearing. Instead, CSPAN is broadcasting the House Budget Committee, committee's chairman, Paul Ryan, R-Wis, hearing with Ben Bernank (as predicted).

Ron Paul Holds First Hearing to Scrutinize Fed

February 9, 2011

Raw Story - Texas Republican Rep. Ron Paul on Wednesday held his first official hearing to examine the policies of the Federal Reserve on unemployment and economic growth.

Paul, an outspoken critic of the Fed, was tapped to chair the House financial services subcommittee on Domestic Monetary Policy and Technology after Republicans retook the House.

"I'm very pleased to hold our first subcommittee hearing in the new Congress on a topic that could not be more critical, namely unemployment," Paul said in a statement. "Despite enormous amounts of monetary and credit expansion by the Federal Reserve in recent years, the nation’s unemployment picture remains bleak. While many focus on the impact of fiscal policies on employment, the effect of monetary policy often goes unexamined."

Three economics experts were scheduled to testify at the hearing, including Sillinger School of Business economics professor Thomas J. DiLorenzo, Ohio University economics professor Richard Vedder, and Josh Bivens of the Economic Policy Institute.

Paul, who is best known to many for advocating the Fed be abolished, blamed the central banking system for playing a role in "creating" the US unemployment crisis.

"In my view we are now experiencing the bust that inevitably results from the misallocation of capital and human resources in a period of artificially cheap credit. It is important to understand the Federal Reserve's role in creating today's unemployment crisis, while also highlighting that high unemployment and low economic growth can persist even in the face of tremendous monetary inflation," he said.