The financial system is a model of fraud, now out in the Austrian newspaper, Der Standard per Viennese economist Franz Hörmann. Franz Hörmann explains the fraudulent workings of the fractional reserve banking system in this interview.
“If one creates money out of thin air and then passes what did not exist before on charging interest and using physical assets as collateral, then that is in reality a model for expropriation (acquiring property without making any payment).”
Hörmann explains in clear language how the money system works, why the financial system is a global fraud, how the use of balance sheets contributes to this fraud and why a gigantic crash is now approaching. He says the whole financial system could well collapse in the next three years. Hörmann argues that the time has come for a paradigm shift in the economics studies as well as in society. This is because economic studies are built on false values.
Information on how the banking system works in reality that used to be available only on websites like Infowars and Global Economy (formerly Digital Economy) have long been classified as a conspiracy theory. This knowledge is now mainstream, established as fact.
The next step can only be to call into account the various bankers and politicians that know how this system operates. They have engineered the banking subprime crisis in order to have a pretext to take liquidity out of the money supply, crash the economy, buy up assets for a pittance, get trillions in tax payer money as “bailouts” in return for worthless thin air paper debts. They demand gigantic interest payments on the national debt that they and their politicians friends have created in an exact repeat of economic events in the 1930s preceding the rise of Adolf Hitler.
The whole point is to drain the wealth of economies while subjecting the labor pool to economic servitude and slavery. The system can destroy national economies and ignite hyperinflation. This world banking system is controlled by corporate brotherhood of central bankers, generally with globalist thinking on their mind.
Milton Friedman persuaded many economists that the Federal Reserve could have stopped the Depression once and for all by providing banks with more liquidity, preventing a sharp fall in the money supply. Thanks to the economic practice of Ben Bernanke, Friedman has been proved incorrect. Preventing an economic depression is a mind-numbing, difficult affair, likely because a depression is systemic in nature, sometimes in ways mere mortals often fail to grasp.
Nevertheless, liquidity has done little to quench the economic fires of recession this round. Banks aren’t lending. Businesses and consumers aren’t spending. The nation is in a vicious or self-feeding cycle. Barack Obama prophesied this week that “we could see a much deeper economic downturn that could lead to double-digit unemployment.” You think?
Do we throw money at the situation or hold back the horses and let nature hold its course? So far, the timing of economist and politicians has done little to stem the tide. More than a year into the most spectacular financial calamity in modern experience, nothing has been done to change that, or any of the other issues that led the nation to this point in the first place. The government has tried all manner of provisions. Consistency hasn’t been a strong suit. Meanwhile, banks are sitting on all your hard-earned taxpayer money designed to prevent a financial event that may be unavoidable considering the limited knowledge and human resources at hand. Even the old classic economists are being thoroughly tested. ~ E. Manning
In headier times a mere six months ago, Citigroup was discussing the sale of assets to raise cash flow and liquidity. With the stock market value of Citigroup plummeting, one of the larger international bank groups has now been saved this morning through the Federal Reserve. This is undoubtedly designed to build confidence in the markets this week as the economy continues to flag amid record job losses in America.
Citigroup is one of the world’s largest owners of toxic collateralized debt obligations (CDOs). This pool of bonds has created one of the largest victims in the financial crisis.
The U.S. Treasury and the Federal Deposit Insurance Corporation is providing liquidity against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate, which will remain on Citigroup’s balance sheet. As a fee for this arrangement, Citigroup will issue preferred shares to the U.S. Treasury and FDIC.
The U.S. Treasury has invested $20 billion in Citigroup from the Troubled Asset Relief Program (TARP) in exchange for preferred stock with an 8% dividend to the U.S. Treasury. ~ E. Manning
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The major determination of the initial $700 billion bailout to buy up devalued securities has been scrapped. “Illiquidity in this sector is raising the cost” coupled with continued pressures on consumer credit. “This is creating a heavy burden on the American people and reducing the number of jobs in our economy.” Obviously, Paulson’s original take on the bailout was heavily overestimated.
What U.S. Treasury Secretary Henry Paulson has just admitted is that the functionality, transparency and the scope of the defective banking instruments is so poor, that buying them up won’t solve the problem or would involve a significantly larger sum of taxpayer money, showing a huge chasm in the underlying viability in the U.S. and global banking industry and perhaps the U.S. economy as well.
The bailout made only a month ago won’t deliver what was promised. Secretary Paulson pitched the bailout plan as a way to rid bank balance sheets of illiquid mortgage assets. Congress may show resistance to releasing the remaining $350 million in funds for future purposes. The real problem is that the national bailout won’t work at all. Banks are still holding the toxic debt that they created.
The United States seems to be stuck in a netherworld of economic dysfunction. Now the U.S. Treasury and Federal Reserve officials are exploring another facility with the idea of supporting the market for securities backed by assets. Paulson wants to use bailout money to encourage investing again. Investing in a terminally broken system is not the answer and a paramount oversight on Paulson’s part. His misjudgment is just another reason why Paulson should not be allowed to continue to tinker with the financial system. He doesn’t have the expertise required, further muddied by a failed and hopelessly bankrupt and antiquated system. This portends bad things for the U.S. economy and the world, but even worse, the U.S. Treasury is now misrepresenting previous actions without answering to any other authority under the guise of failure. Has anyone really studied the problem enough to be able to develop a core solution?
Continuing to invest in the same bankrupt insanity is poor thinking at best. Trying to convince investors to do the same thing is even worse. There is a push overseas to rebuild a new monetary architecture with a new global financial society. Will desperate American politicians pile on in an effort to redeem themselves and what is left of our failing financial system? What real options does America have?
~ E. Manning
Apparently Kevin Warsh, Governor of the Federal Reserve believes that the world should look upon the financial hell of the last year with a hint of reminisce. “This challenge of creating a new financial architecture is hardly unique to the United States. The difficult choices made by policymakers and market participants around the globe will have real implications for future growth prospects.” That is in fact what many world leaders are intently interested in at the projected global financial summit that is planned at U.N. headquarters in New York City. The wild promotion of the financial summit is driven by the desire to change the current financial architecture.
Warsh spews plenty of bankerspeak which essentially boils down to this summary: the new financial architecture must be properly understood, in full recognition of current business relationships and restrained accordingly. Not so coincidentally, this recommendation would keep the control firmly among the International Society of Bankers, the loosely amalgamated brotherhood of central bankers headquartered in Switzerland and Rome.
Warsh correctly blames the current financial crisis on inadequate market discipline, excessive reliance on credit ratings coupled with poor credit and liquidity risk-management practices by many financial firms. However, until recently, the Federal Reserve has been unwilling to promote any changes, instead promoting the vaguely governmental mantra of financial literacy.
Warsh recognizes the global economic challenge, but does not admire the “implementation of well-intended housing policies.” Instead, the central banking consortium clearly sees the new financial architecture solely in business terms that will fuel economic growth, a clear promotion of continued Republican financial policy that has been gradually adopted over the last several decades. In essense, the advance of Republican power, policies and laissez-faire trickle-down economics has bolstered the role of not only the Federal Reserve, but the global power of central bankers through the power and prestige of the dollar, now firmly under their control.
The new Obama administration has more to fight than mere Republican policies. They must come squarely to terms with global bankers that currently hold the keys to their financial success. With the current fiscal situation of this nation regarding the fiat money of the dollar, the bankers have politicians largely where they want them. Arguably, John F. Kennedy lost his life as a result of opposing the global central banking community. They still hold the same power of life and death in the world today, only more so. ~ E. Manning
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In dealing with the bailout the reader needs discernment that is provided on this website. Remember that the ultimate solution for global banking per the global central bankers is the integration of Basel II rules. Basel II rules don’t prohibit the kind of banking profitaking or abusive policies that we have seen in the United States over the last decade or more. Basel II, the creation of global bankers is little more than a charade, pretending to be a solution for little or nothing. Basel II merely restricts the surface exposure of the tricks that accountants play with the direction of their superiors.
The bottom line is that the liquidity crisis in America is in large due to semantics in accounting, combined with the fear of bankers. When payback has come home to roost, bankers have become very protective of themselves. The result is clear to see. These accounting tricks that are used by bankers and big business to bolster the bottom line while accentuating power and growth has become the established tour de force of the industry that they don’t want to give up. If you haven’t deduced the truth from reading this blog over the last year, know the truth now. The crisis that we have in largely based in fear because of rampant abuse of the system. Bankers know what awaits them because of what they have done along with the sponsorship of the U.S. government. Turning a blind eye to improper banking and accounting standards because those standards “enriched” the nation has finally completed the cycle. Regulations weren’t the problem. The will to enforce regulations along with acceptable standards was and still is the Achilles Heel of the system.
What everyone in the U.S. economy has forgotten about is the glory of small business creativity and empowerment that the United States as a nation used to enjoy. Instead, the U.S. has turned to fascist corporate policy and close scrutiny on personal freedom as the safe way to live and profit. Increasing control, now available through computers, the internet and global tracking technologies is becoming the established way of policing the nation. A meaningful grass roots recovery will be difficult to impossible until this changes. Ultimately, this is what is needed to restore any level of quick recovery to the nation. Politicians must give up some of the control that they are determined to enjoy. ~ E. Manning
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As you’ve probably heard by now, industry results for banking in the second quarter were pretty dismal. The results were not surprising as the industry coped with financial market disruptions, the housing slump, worsening economic conditions, and the overall downturn in the credit cycle.
The main reasons for the drop off are the same that we’ve been seeing since the second half of last year:
declining non-interest income,
rising non-interest expense,
decrease in gains on securities sales,
and mounting loss provisions.
The eleventh bank failure of the year came into play with Silver State Bank of Henderson, Nevada. What is the problem with banking? Mainly liquidity. That is often an elusive problem for banks with abused balance sheets and a nation full of securitized bonds that are pretty much worthless.
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