Bailout Insanity

Our sensibilities are being assaulted regularly by a few hundred billion here and there to bailout these extremely wealthy institutions or those. Recently, I had a giggle-fest off the news that President Obama and the Democratic Congress just signed us up for a hundred billion dollar loan to the IMF. Imagine that, the biggest debtor nation in the history of the world making a loan to the International Monetary Fund.(1)

If the bailout madness is all a little confusing, that's as it should be. The Federal Reserve, and their Board of Governors, are a privately-owned institution that has the authority to create American dollars. You thought the mints did that right? Well, they do to a much smaller degree, but the Fed is a much more active god of currency. They are also extremely secretive, recently witnessed every time Congress questions them about bailout funds.

This has spurred Rep. Ron Paul to once again submit legislation that will give the Comptroller General the ability to audit the Fed and their banks. Even though the Fed makes our dollars, Americans do not have the right to know whether their books are balanced unless the Fed says it's ok.

H.R.1207 will also order the Comptroller to complete an audit of the Federal Reserve by the end of 2010. Dr. Paul has submitted similar legislation in the past, and this time would be unremarkable but for this. 190 fellow representatives, more Republicans than Democrats, have co-signed this legislation. Some of the co-sponsors sit on the Financial Services Committee where the bill now waits for further action.(2) The Federal Reserve has predictably hired a well-connected PR agent (ex-Enron and Clinton employee, Linda Robertson) to better their image in Congress.(3)

In the House at least, there is widespread and growing dissent on how the Fed has been managing the affairs of the economy. No shocker, since they are (mis)managing the handout of the majority of some $12.2 trillion in government commitments, buying and insuring bad assets, lending money on bad collateral, and generally using debt to pay off debt. Now, some might say this is for our own good, AIG is too big to fail after all, as are all those money market funds and supposedly credit-driven banks.(4)

The Fed however, and Chairman Bernanke, have two ulterior motives. The first one is easy to understand. The Fed's Board of Governors all have hefty amounts of money that they have invested in the large financial institutions we collectively call Wall Street. If Wall Street loses money, these guys lose money. If they can get the taxpayers to pick up the bad assets, then they just saved their great great great great grandchildren's retirement money.

The second motive is to underwrite the fractional reserve ponzi scheme, explained best by the several resources below. Call your representative and ask that they co-sponsor HR1207 and force the Fed to disclose the facts about what is supposed to be OUR economy.(5) This is especially important if your representative is one of the 71 who sit on the House Financial Services Committee.

Notes:

(1) http://www.reuters.com/article/politicsNews/idUSN0244336720090602

(2) http://www.govtrack.us/congress/bill.xpd?bill=h111-1207

(3) http://www.reuters.com/article/politicsNews/idUSTRE55460K20090605

(4) http://www.nytimes.com/interactive/2009/02/04/business/20090205-bailout-totals-graphic.html

(5) https://writerep.house.gov/writerep/welcome.shtml

Resources to understand money creation, the fractional reserve banking system, and why the Federal Reserve is the Biggest Ponzi Scheme of all time.

Money As Debt (animated video, describes history of currency and current fractional reserve banking practices)

Web of Debt

Bailout in Layman's TermsMoney As Debt (1995 video, experts predicting coming collapse)