9 Trillion Fed Bailout Was Good Right? Wrong, Wrong, Wrong!

One could say that without the liquidity provided by the Fed, estimated at 3.3 Trillion Dollars of the 9 trillion dollars lent out, the whole banking complex and commercial paper complex could have melted down. But it is disturbing that the Fed has so much power that apparently it can bail out the world. If the Fed knew it could bail out the world, that is perhaps why it wasn't worried about the credit bubble in the first place. After all, it only hurt main street. There is something very wrong with this picture isn't there? It is one thing to allow liquidity lending to banks, but they turn around and pass no savings onto us. And there is money lent that appears to be unaccounted for.

Once we find out that the Fed deliberately allowed too little regulation, perhaps those that want fiscal responsibility, like the Tea Party people, will understand that mainstreet has been hit by a giant, massive scam! The bailout was 13 times larger than TARP! While the operating money was paid back, the US banks don't get bailed out enough to lend to US citizens, while liquidity is distributed to European banks. And we know that the most recent QE2 was liquidity for the European banks as well, according to Tyler Durden of Zero Hedge. This was of no help to US banks in 2010/2011 at all! While Americans are unemployed, European banks that are massively leveraged are being kept afloat by our Federal Reserve. It is nothing more than an international cabal. The Fed wants real estate to crash more, and this could happen before more money is infused into American banks.

Now do you Tea Party people believe me as I have been writing about the banks being at fault for the credit crisis? The Fed causes bubbles, causes crashes, as with the FASB mark to market that the cabal used to crash housing faster, and bails everybody out but mainstreet. Housing started to crash in late 2006, but mark to market was a giant banker short that many were tipped about as it was applied afterNovember, 2007. And then the lifting of mark to market was a giant pump that the in crowd of finance also knew about in early 2009.

And yet, this moral hazard of bubbles and crisis and rip offs will continue if financial corporations know they are too big to fail. That is what faces us in the future, instead of saving and investment being rewarded. Debt and crisis is now what is being rewarded, until it isn't.

We have a massive banking system that is introducing massive moral hazard, and admitting that the derivatives that hold the financial system together will put taxpayers at major risk, whether that be in Ireland, Spain or the USA. Think about it, we have a giant living organism of finance that is now able to tell countries what to do, when to borrow, and how much to pay.And in return big investors, including the bailed out banks, have risk free investments guaranteed by guess who? You!

Only sovereign nations can fight this global banking cabal, through the threat of default, because individuals cannot do so. And even nations are at risk of losing their sovereignty to this system of deceit and lies.

Ali Velshi on CNN was trumpeting the goodness of the Fed's bailout. The question is: Is the Fed the good guy?

As we look into this question please view read my Ebook, Ponzi Housing for Dummies, found at strategicdefaultbooks.com. Those banks that made and bought and sold very toxic mortgages never before made those available to the masses. An anonymous responder posted this to my website in disagreement with me:

"Dear Sir,

Please forgive my bluntness. When you say that Basel 2 caused the Ponzi Housing and Foreclosuregate... it demonstrates a perspective that is skewed, short-sighted, and gives cover to those who actually committed crimes.

If by B2 'caused' the crisis you mean... taking steps to shed a light on the mortgage ponzi problem, with the intention of bringing it to it's dismal end ... then yes B2 'caused' the crisis.

If you mean... breaking the long-held silence on the pervasive fraud in the banking system... then yes B2 did that.

If you mean... requiring devious bankers to have actual individuals not straw persons on the other end of the transaction... then yes they did it.

If you mean asking the bankers to actually know where the money they use comes from... then yes they did.

From this perspective, yes... B2 'caused' the crisis. But by the same logic the sheriff 'caused' the criminals to be in county jail.

But is that the real, real story? No, their actions caused the sheriff to get on their case, which in turn caused them to go to jail.

Blaming Basel is another way to deflect responsibility of individual white-collar criminals. I.e. like the 'housing crisis was totally caused by people not paying the mortgages, dude'. But we know that's not the real, real story. Classic backwardsland deflection.

In this case, among other things, B2 attempts to bring the mortgage ponzi scheme to an end, shocking but necessary. Perhaps it causes a bit of a crisis. But it's not the root or the problem, but rather, the rooter-out of the problem.

In the question of chicken and the egg: Don't skip the early steps. That's where you'll find the answers. By the time Basel 2 came along the fraud was already a major focus. In fact, the reason for Basel 2 was that the fraud was not yet detected when Basel 1 was negotiated and was not addressed. Basel 2 specifically put in more focus on rooting out fraud to whatever degree is possible under the circumstances. Of course the pointing out of fraud is not the same as creating it. Hopefully your readers understand that.

Peace."

I do not know to this day who this anonymous poster was, but he is doing much the same as Velshi was doing, looking at the aftermath of the crisis and praising the central bank taking action to hold the economy together.This anonymous fellow was mainly referring to the central bank complex telling FASB to demand mark to market, which resulted in the stock market and housing market tanking massively. But again, even this was the aftermath, the popping, of the housing bubble.

But it is my contention that you have to look at the beginning of the crisis. As my link above shows, these central banks worked to get toxic loans into the system. I even write about Alan Greenspan's involvement in this scam in conjunction with actions taken by the Bank of International Settlements.

It is my contention that mainstreet does not comprise the constituency of the private Federal Reserve Bank.

The bailout may have been necessary, maybe, but it wasn't good. The reason it wasn't good is that there must be regulation in place to stop this scam from happening again. I personally believe that there will be no such regulation and this whole process with the phony securitization of mortgages could start all over again, with dangerous repercussions.

Don't be fooled. The Fed is not the good guy! If you believe that the Fed is the good guy perhaps you believe that the fireman who sets a fire in the forest only to put it out is a good guy too.

Clearly, the banks got free money, or virtually free money, to the tune of 9 trillion dollars. They didn't pass a dime of this easy money onto the credit card holders, the mortgage holders, or anyone. They kept the profits for themselves, used much of the money to cover their bad bets, which should be criminalized, and they bought treasury bonds so they could make money off of the spread that they got between the free money they got and the interest paid by Us taxpayers. Instead of letting rates rise, to help savers, the Fed insured that rates stayed low, and that the banks could profit off the spread. I have no doubt that some of these banks borrowed short and lended long in this matter.

One more important point is that banks got massive bailouts when mainstreet got no bailout for its mistakes, even though the big banksters caused the mistakes. Think about that for awhile. When you consider that 5.7 trillion dollars of the Fed bailout were not for day to day operations, and that while banksters were getting this free money, they were raising your interest rates wherever they could, and we can see that this was a giant money grab and the class warfare was from the top down!

Even the bailout of GM and Chrysler, which saved real jobs, not financial jobs that steal from mainstreet, cost little in comparison to this massive financial bailout. And yet, Fox News and others spent all their time on these smaller potential hits to mainstreet. Self preservation becomes an attack on mainstreet, even by the media, even by Fox News.

And finally, we have Simon Hobbs on CNBC saying that Ron Paul who wrote a book about ending the Fed, will make things tough in congress for the central bank who bailed out the world. I always thought that firemen who light fires only to put them out are not considered heroes.