The Church of Kharma Futures

The Rev's views on politics, events,faith, and the world. All content copyright Church of Kharma Future 2007-2015 All rights Reserved

Banks, the Fed, and The State

Posted by revkharma on March 20, 2008

I urge you to look to Mr. John Wrisley’s page, from March 3o. Once again, he’s on the mark!

As I am unschooled in many things to do with global economics, having learned only what I have been taught in my college days many years ago, and updated my my own readings, I am at this time confused by many of the actions of the government in recent years.

If I have the details right, the Federal Reserve was created to assist the commercial banks (State Banks) and prevent them from becoming insolvent, through federal interventions.

During the 1980’s, there was a crisis with the Savings and Loan industry. Almost overnight, it seemed, the S&L’s were collapsing, their assets suddenly depleted. The media attacks against the greedy S&L owners made them into the Simon Legree of their time. The Federal Government rode to the rescue, extending the umbrella of protection over the weak and helpless Savings and Loan banks.

In the 1990’s there was another crisis in the finance community. It seems that bankers were practicing something evil, called ‘Redlining’. It boiled down to marking certain areas as off limits for conventional mortgages. These areas were statistically unreasonable risks. The odds of default were so great as to present an insurmountable risk of foreclosure on any loans. Activists screamed, howled and protested. The US Congress once again rode in, menacingly directing the mortgage business to restructure their practices, to begin making loans to people who were being ignored. Soon after that, the ‘subprime’ mortgage market was born. Through twists and turns and many gyrations, monies were made available to finance loans with much greater risks, at significantly higher rates, of course. The Federal Reserve Bank continued to cut lending rates, making more and more money available. Banks were shoveling money out the doors as fast as Greenspan and his pals could print it.

Then, one day, someone cried “HALT! There is just too much risk here!”. Investors, prodded by media inquiries began to look at the actual contents of the portfolios, and stopped buying some of the paper. The media began to cry that the sky was falling. “Why one in 87 sub-prime loans are more than 30 days delinquent! That’s a disaster waiting to happen. ” And the Sub-Prime crisis was born. Each day more and more bad news was printed, talking heads on 24 hour news channels shouted that the entire mortgage business was in danger, the housing market ‘bubble’ was bursting. This would be the death knell of the economy. Banks and investment firms, which were previously solid as steel were tottering, and shaking like jello. Never mind that the sub-prime market is a small percentage of the over all mortgage business. There are Villains here. Greedy mortgage lenders, making predatory loans to unsuspecting innocent wanna be home owners. These people just wanted a home of their own. Who cares if they can’t afford it, they’ll deal with the balloon payment when it comes due. In the mean time, just sign the papers, and hand them the key. It can’t be their fault, they only signed the contract. It had to be the dastardly, evil, greedy mortgage lenders at fault.

Anyway, the crisis spiraled up, and up. Eventually some big investment banks shuddered. The fed, with Bernanke in now in the saddle, rode in to the rescue once again. It seems that now, the Federal Reserve Bank has once again solved a crisis by presto-chango altering its mission, and adding investment banks to its portfolio.

Is no one else watching? The federal government pressures industries to do things not in their interest. The industries follow the pressure and then the same federal government uncovers a new ‘crisis’ which requires it’s own brand of intervention. Another industry, previously in the hands of the private sector, is now under the mantle of Big Government.

How soon before we see the Federal Reserve ( or the Treasury, it’s little puppet) buying outright controlling interests in major private banking corporations? Of course, it will all be in the best interest of the economy. We need help, there is a recession looming.

Remember the words of the illustrious Benito Mussolini: “Everything in the State, nothing outside the State.” It is the direction in which we are headed, no?

Keep the Faith!

The Rev

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4 Responses to “Banks, the Fed, and The State”

  1. dON said

    RIGHT ON, REV!

    BANKERS, CORPORATES, CONGRESS ARE SO “IN YOUR FACE” WITH ARROGANCE AND AN IRREFUTIBLE F— YOU, THEY MIGHT AS WELL SPELL IT OUT…..WE’LL DO WHAT WE DAMN WELL PLEASE TO TAKE OVER GOVERNANCE, I.E., CONTROL, OF THE U.S. TO BENEFIT OUR INTERESTS AND ONLY OUR INTERESTS.

    DO THEY HAVE TO HOLD A SPECIAL TOWNHALL TO LET
    YOU KNOW!
    LOOK AROUND YOU. SINCE BUSH-WACKER
    CAME IN 8 YEARS AGO EVERYTHING DECENT THAT AMERICA STOOD FOR HAS BEEN DESTROYED.

    THAT DOESN’T BOTHER YOU? YOU THINK IT WON’T AFFECT YOU? THINK AGAIN.

    WHAT WILL IT TAKE TO WAKE YOU UP THE TO THE FACT THAT IF YOU DON’T START TAKING IMMEDIATE ACTION AGAINST THESE PREDATORS, YOU CAN KISS YOUR ASS-ETS , CIVIL LIBERTIES, AND EVERY OTHER FREEDOM NOW TAKEN FOR GRANTED GOOD-BYE. GONE. PERIOD. FOREVER.

    WHY DO YOU THINK “THEY” HAVE DONE NOTHING ABOUT CLIMATE CHANGE, NOTHING ABOUT MEDICARE, NOTHING ABOUT SOCIAL SECURITY, NOTHING ABOUT HEALTHCARE?

    JUST MAYBE, THEY KNOW YOU’RE NOT GOING TO BE HERE TO COLLECT. THINK ABOUT IT

  2. […] Banks, the Fed, and The State Soon after that, the ’subprime’ mortgage market was born. Through twists and turns and many gyrations, monies were made available to finance loans with much greater risks, at significantly higher rates, of course. … […]

  3. Hi,
    I like the way you are performing your work .. Its really amazing .. The topic is really brilliant and the way you have discussed is really fantastic!Riches may enable us to confer favours, but to confer them with propriety and grace requires a something that riches cannot give.

  4. deaconkharmafuture1 said

    The main idea actually, is THEY are doing alright.. possibly too much. Capitalism requires failure as a contributor to it’s success. without failure proper decisions and proper ways to run business are ignored since there are no consequences. with no consequences, well heck you get the idea.

    government was a necessary evil and best when kept small. our founding fathers knew this. there only to ensure defense of personal liberty granted by God. the current attitude of “somebody’s gotta do something” (somebody ELSE) and the same people all too happy when the government volunteers, better think twice.

    “climate change” the governement IS doing something and you betcha you’re going to love increased energy bills and other manufactured goods. Jose Mccain and Joe Lieberalman have drafted a carbon cap bill to cap off carbon emissions and inrun the US into the Kyoto deal. forcing carbon emission controls and thus raising production costs. hmm out of the goodness of the corporations’ hearts, they’ll eat the increased production cost right? sure since business isn’t in business to make the “evil” profit.
    no silly! the cost WILL be passed on to the consumer and thus a situation is born that needs, no screams, “help me big governement!”. There are people who cannot afford these new costs of electricity, they are freezing! the poor and downtrodden! “SOMEBODY MUST DO SOMETHING”. Government steps in and offers it’s help again. Remember California and the brown outs and rolling blackouts? Your governement involvement at its best.

    Social security??? THaT WAS GOVERNMENT INVOLVEMENT WHEN IT WAS CREATED. Now you see we have a crisis to save it. Again save us from what YOU created Big Government!

    So now get govt involved in healthcare when the VA is a nice microcosm of how well that works, or social security or education. yes please get involved big government. “SOMEBODY” needs to do something again!!!! Personal responsibility sparky! not government responsibility.

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