It is appalling to see the NYPD hauling off people at random.\u00a0 Most of the ones they grab are women, young men, and people of small stature.\u00a0 I did not see them haul away anyone that could have weighed more than 60 kilos.\u00a0 In review of the news footage, the frustration and rage of the participants are as evident as their solidarity to the ’cause.’<\/p>\n
But what is the cause, and what are they hoping to achieve?\u00a0 Everyone wants to protest against what is wrong, but it is rare to hear what they propose to correct the situation.\u00a0 No one wants nuclear power plants, but they want clean air and propose \/ force the introduction of electric autos.\u00a0 America consumes a quarter of the world’s resources, drives the biggest autos; what the heck does some mom need a Ford Navigator or F-250 quad-cab pick-up for?\u00a0 Jeepers.\u00a0 The irony gets my knickers in a twist.<\/p>\n
So back to the subject.\u00a0 What the people are up in arms about can be summed up in one picture…ngg_shortcode_0_placeholder<\/p>\n
Yep, Greed.<\/p>\n
Now to back up a bit, let’s look at how we got into this mess.\u00a0 In order to do this, a bit more information is required.\u00a0 Time to review a bit about banks and the reserve system.\u00a0 A bank is (well was) required to maintain a capital (that would be cash) reserve of 10%.\u00a0 In simple language, if they had 100$, they were allowed to loan out 90$.\u00a0 10$ had do be kept as hard currency.\u00a0 It already does not sound good.\u00a0 However, when they made a loan, for example to the Farmer for a new Tractor, the money would come back over time with interest.\u00a0 In the meantime, other depositors would be putting money in their accounts, and the cycle would continue.\u00a0 Sort of a ‘legitimate’ Ponzi-Scheme<\/a>, (If you do not know what it is, you had better read the article, it will come up later.)\u00a0 Meanwhile here is the business model of loans (From Rev. Sheldon Emry<\/a>):<\/p>\n When a citizen goes to a Banker to borrow $60,000 to purchase a home or a farm, the Banker agent has the borrower agree to pay back the loan plus interest. At 14% interest for 30 years, the Borrower must agree to pay $710.92 per month for a total of $255,931.20. The Banker then requires the citizen to assign to the Banker the right of ownership of the property if the Borrower does not make the required payments. The Bank then gives the Borrower a $60,000 check or a $60,000 deposit slip crediting the Borrower’s checking account with $60,000. The Borrower then writes checks to the builder, subcontractors, etc., who in turn write checks. $60,000 of new “checkbook” money is thereby added to “money in circulation.”<\/span><\/p>\n However, and this is the fatal flaw in a usury system: the only new money created and put into circulation is the amount of the loan, $60,000. The money to pay the interest is not created, and therefore was not added to “money in circulation.” Even so, this Borrower (and those who follow him in ownership of the property) must earn and take out of circulation $255,931, almost $200,000 more than he put in circulation when he borrowed the original $60,000! <\/span><\/p>\n Now, the interest rate is not 14%, (except for those who have credit cards at 18-24%—a topic for another time).\u00a0 However, you get the picture.<\/p>\n Let’s do a quick look at the recent crisis, the one in 2007.\u00a0\u00a0 First a quick note about ‘local’ banks.\u00a0 Where I grew up, I think there is one remaining; Phoenix Federal<\/a>.\u00a0 My Family was instrumental in the founding of Harleysville National Bank<\/a>.\u00a0 Located curiously enough, in Harleysville, PA.\u00a0 In the `80’s, my banker told me that after the retirement of Walter Dahler Sr., things were going to change.\u00a0 One of the changes, was that the charges for ‘service’ were planned to rise, with the target of up to 30% of bank revenue coming from the “Service Charges”.\u00a0 I do not know about you, but last time I checked, over 90% of the transactions in a bank occur electronically.\u00a0 Even in Germany, the cost of electricity is not enough to warrant what they charge for ‘account maintenance.’<\/p>\n So, back to 2007.\u00a0 Thanks to Alan Greenspan<\/a>, and his low rates, money was ‘cheap.’\u00a0 Quick lesson:\u00a0 Put ten people in a room.\u00a0 A hot room.\u00a0 There are three bottles of water.\u00a0 Normally the bottles of water cost 1$ each.\u00a0 One in the room had 100$ in his wallet, six in the room have 3$ in their wallets.\u00a0 One has 2$, and the other two have .50 cents.\u00a0 The one with the hundred dollars offers ‘credit’, without proof of repayment to all who want it, for a rate of only 5% over 10 years.\u00a0 Suddenly, there is a flush of capital, and the three one-dollar-per-bottle water are suddenly worth 3$ each.\u00a0 Now the bottles of water have been sold, but not opened.\u00a0 Just like a rabid eBay auction, the value continues to rise, and the man with 100$ continues to make loans.\u00a0 Suddenly, water is no longer seen as a commodity, but as an instrument of speculation.\u00a0 Think about it.\u00a0 If I bought one of the bottles at 2$, and they are now worth 3$, I bet that they will go to 5$.\u00a0 So one in the group borrows more money and buys up all of the bottles at 5$ each.<\/p>\n Ok, so that is what happens when money suddenly becomes ‘cheap.’\u00a0 Let’s apply that to houses.\u00a0 The ‘American Dream.’\u00a0\u00a0 Something physical, not one that once the cap is twisted, the worth declines.<\/p>\n Suddenly, starting in 2005, new ‘products’ were offered by the banks.\u00a0 ‘Low Doc[umentation]’ and ‘no-doc’ loans.\u00a0 That meant that any poor sap, regardless of employment history, credit or otherwise, suddenly was able to buy a house.\u00a0 All of the Democrat’s cheered.\u00a0 Housing prices were increasing, and one of the new products was an ARM; an ‘Adjustable Rate Mortgage,’\u00a0 with an introductory rate of almost nothing, and increasing incrementally over the life of the loan.\u00a0 With the explosion in house prices, everything seemed great.\u00a0 Safe.\u00a0 Heck, even people who had equity went out and borrowed against the accrued value in their homes…Boats, Plasma TV’s, Time-shares, and second homes.<\/p>\n Unfortunately<\/em>, a local bank really isn’t.\u00a0 20 years ago, when I bought one of my homes, the mortgage started at Harleysville, then it was with PNC<\/a>.\u00a0 I forget who they were.\u00a0 Then the loan was sold to Watchovia, in the end it ended up at Washington Mutual<\/a>.\u00a0 What is that all about?<\/p>\n Ok, we are finally to 2007.\u00a0 Remember the model above?\u00a0 OK, it is based on 14% interest.\u00a0 Yet, even at 5% over 30 years, there is a heck of a profit there.\u00a0 A bank needs to have reserves.\u00a0 So they can make more loans.\u00a0 What they do then is package up the loans they have made, and sell them at a discount against their value in the future.\u00a0 If they make a $200K loan, that will in 30 years net $325K, they sell the loan to another bank for $240K.\u00a0 The ‘other’ bank assumes the payments from the creditor.\u00a0 Nice deal.<\/p>\n This however was not enough.\u00a0 Somehow, the banks developed a NEW product that put all of these loans together and created a “SRV” (Special Investment Vehicle).\u00a0 They sold these on the market, all over the world…Goldman Sachs<\/a>, Lehman Brothers, the list goes on…remeber “Low-Doc \/No Doc”?\u00a0 No one was paying attention.\u00a0 After all, these notes were based on the rising values of real propery, not bottles of water.\u00a0 Same principle, different perspective.\u00a0 Oh, and by the way, they were rated AAA by the same companies that are downgrading the very countries that are victims of this scheme.<\/p>\n Time for a picture….ngg_shortcode_1_placeholder<\/p>\n Time to wind this up…So, where did this money come from?\u00a0 The Federal Reserve.\u00a0 Who are they?\u00a0 We covered that in the last post.\u00a0 Who is distributing the money?\u00a0 ‘Local’ Banks.\u00a0 An oxymoron if I ever heard one.<\/p>\n Why are are people protesting?\u00a0 Because they have been abused.\u00a0 Albeit complacent sheep, who are now gathered in a herd and bleating that they are hungry \/ sick \/ tired \/ mistreated etc.\u00a0 However, they complain and fail to identify the problems, only voice their discontent.\u00a0 Bullshit.<\/p>\n Here are the solutions:<\/p>\n Under section 8 <\/a>of the founding Constitution of the United States of America, the founding Fathers gave the right to “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures…”<\/p>\n Not banks.\u00a0 Banks take a product, (monies guaranteed by all citizens and property in the USA), and play with it for their own benefit.\u00a0 Sorry, but if a bank wants to have “Federal”, “National”, or “Trust” in its’ name, it should be controlled directly by the Congress.<\/p>\n Oh, that would include the ‘Federal Reserve’.\u00a0 It should be immediately abolished, and the control turned back over to the US Congress.\u00a0 (OK, I am not finished with that bunch of crooks (except Ron Paul) yet..next time).<\/p>\n However, the United States of America was founded by a group of extremely well-educated gentlemen, who knew human nature.\u00a0 (It does not change.)\u00a0 Jeepers, without I-phones, fax, or Facebook! How did they manage that?\u00a0 Well, they were EDUCATED IN HISTORY.<\/p>\n The solution to this situation is to return to a Constitutional Government as designed by the Founding Fathers.\u00a0\u00a0 Do a bit of reading on Jefferson, Adams and Franklin….<\/p>\n OK, for those who are a bit slow, or want to see the solutions in clear text here they are:<\/p>\n It is a time to end this nonsense.\u00a0 First the American Indians, now the people who benefit from that American Holocost.\u00a0 Change is inevitable.\u00a0 However, those that benefit need to be redefined.<\/p>\n more to follow…ngg_shortcode_2_placeholder<\/p>\n","protected":false},"excerpt":{"rendered":" OK, so in the last post we covered a bit about banks, investment and the Federal Reserve.\u00a0 One of the things that has been bothering me since hearing the first reports of the ‘Wall-Street occupation’ is that there seems to be absolutely no direction to the protests.\u00a0 Of course people are frustrated, heck I have … <\/p>\n\n
\n
\n