How loans and mortgages by banks are fraud

Revolution Not

Widespread Silver Bar Shortages

If everyone demanded physical delivery of silver, we’d be looking at $500/oz.  If hyper-inflation hits, the sky is the limit, $5,000, $10,000, who knows, but they will still buy the same amount of goods and services they buy now.  Saving metal coins is not a way to get rich. It will only preserve existing wealth while currency is devalued.

coinupdate.com

By Patrick A. Heller on November 18th, 2010
Categories: Featured Articles, Gold and Silver Commentary, Precious Metals

As of today, there are no longer any regular wholesale supplies of the 1 ounce through 100 ounce silver rounds and bars available for immediate delivery.  It may be possible to locate incidental quantities of some product, but most wholesalers are now promising two to four weeks delivery to allow time for the silver to be fabricated.

As a result of the shortages, premiums have started to rise.  So far, the increases have been modest, on the order of 0.5-2%.  However, if the shortage grows, expect to see further and larger premium increases in the coming weeks.  We could see a repeat of the late 2008 gold and silver buying frenzy, where product availability got as slow as 1-4 months after payment.

Read more…

The Secret of Oz

The Secret of Oz is a new documentary video from the creator of “The Money Masters.”   Basically one of the main premises of the film is that as long as the government or some other good guy controls the issuance of currency, and it’s issued debt-free, the money system will benefit the public and not just the elite.   I don’t entirely disagree with the idea that a fiat system *could* work for us, but in practice the power to issue currency has repeatedly fallen back into the hands of the bankers.  Even if we allow them to issue something as simple as gold or silver receipts, bankers will inevitably turn it into a fractional reserve system and defraud the depositors, concentrating wealth for themselves. So I’m surprised they are so quick to dismiss gold. 

Rich people do already hold most of the gold, yes.   But they also control the government printing presses, and it’s a lot easier to inflate paper (or numbers in a database) than it is to prevent people from digging more gold out of the ground.  Private companies can will continue to mine gold, somewhere.   Metals markets are international.  For thousands of years, humans have been able to spend a gold coin anywhere in the world.  Metals already are the world currency. Fiat currencies come and go but gold holds intrinsic value.

Now as for the rich hoarding it, I would argue that inflatable, easy-to-manipulate fiat money systems have enabled the bankers to obtain a disproportionate share of real assets, such as metals and property, using their 100:1 fractional reserve leverage and inflationary money creation thru loans. Are you aware that in the ’30s the US government actually confiscated gold in the name of saving everyone from the banker-engineered great depression?

If we went to a metal and barter economy, commerce could be less centralized yet more global. Even gold and silver certificates present the opportunity for fraudsters to create a fractional reserve system which is in essence a ponzi scheme. While metal bullion is not fraud-proof (recall recent tungsten bars plated with gold) it’s significantly more difficult to manipulate on a large scale.

• A big pile of gold doesn’t do you much good unless you spend it into the economy.
• It’s difficult for bankers and governments to maniuplate the worldwide flow of gold out of the ground, due to market competition.
• It can’t be counterfeited with current technology

We don’t actually need a currency “backed” by anything.  All we need are land, food, water, protection, and some metals and other raw materials to trade for goods and services. I want no part of this casino gambling.

The international banking elite control the issuance of currency. They are not going to give up that position without a bloody fight. BUT… gold and silver exist already in the free market. We can dig more of it out of the ground, while bankers, government, and whoever has control over the issuance of currency can “row” the fiat economy with ease. “Power corrupts, absolute power corrupts absolutely.” One thing corrupt officials can’t do, however is create gold or silver out of thin air. They can flood the market, but they’ll be losing their own wealth in the process. And no, the bankers don’t control all the gold. Actually I believe the Vatican is the single largest owner of gold in the world. Better brush up on your Hail Marys.

Maybe someday we’ll find a way to enforce strict control over a fiat paper currency, and permanently protect ourselves from corrupt hands massaging all the wealth out of the economy by means of inflation and deflation. Until this technology exists, metals are the next best thing.

“It’s not what backs our money, it’s who controls the quantity.” Makes sense.  And the quantity of gold is a lot harder to manipulate than the quantity of fiat paper or zeros in a database.
The new human rights movement

Although I honestly think in the current environment gold and silver are the most fraud-resistant form of money, there is one big problem with it – the environmental cost of mining. We need to find sustainable methods to mine gold that don’t involve cyanide. But when you weigh the downside of living in this banker-take-all system, it becomes apparent which the lesser of 2 evils is.

Thank you for reading, and may your chains rest lightly.

Who wants to be a millionaire?

From BSC

Central banks start to abandon the U.S. dollar – From the Wallstreet Blogs, Fortune, CNN

“Just last week, America’s debt lept $166 billion in a single day. That one-day run-up is greater than the entire U.S. annual deficit in 2007. And Americans, the world’s consumers, continue much of the behavior that helped the U.S savings rate drop so low.

The dollar has been in free-fall since 2007.

Last year, both China and Russia have questioned why the dollar should be the world’s reserve currency.  (Naturally, they were advocating for the ruble and yuan).

A new report from Morgan Stanley analyst Emma Lawson confirms what many had suspected: the dollar is firmly on its way to losing its status as the reserve currency of the world.

And just last week, the United Nations released a report concluding that the dollar should no longer be the world’s reserve currency because it is not stable enough. The dollar is down 5% over the past month, and even currency traders don’t see it as a safe haven any more.

There is certainly an element of economic competitiveness in those statements from foreign bodies and governments, but at the same time, Americans houldn’t be surprised that, in these touchy times, central banks want more of a measure of security than the dollar can afford right now – particularly when we’re running up an enormous deficit through the costs of stimulus programs and two simultaneous wars.”

———————————————————————————————————–

The US Dollar is losing reserve currency status because it is being over inflated to near worthless proportions, by being printed with wreckless abandon by PRIVATE CORPORATE BANKS.

If we do not take back the power to issue our own currency, as provided by the US Constitution, we will never escape the DEBT SLAVERY that occurs by allowing private central banks to loan us our own money at interest!  This currency black hole creates inflation and loss of value because every dollar “borrowed” comes with debt attached, and in order to pay the interest on the first dollar we have to borrow more dollars, again with more interest!  These bankers have run this same scam in other, less sophisticated countries.  Now they’re running it here.

These are real images of devalued, inflated currencies from the last 60 years.  Some so worthless that the people use them as wallpaper or simply throw them away.  Imagine a loaf of bread costing 200 billion dollars!  Thats what they pay in Zimbabwe.

DON’T BE A SUCKER!

Legislation would bar taxpayer bailouts of derivatives ponzi schemes

April 15 (Bloomberg) — Goldman Sachs Group Inc., JPMorgan Chase & Co. and their biggest rivals would be forced to wall off derivatives trading operations from their commercial banks under a measure to be introduced by Senate Agriculture Committee Chairman Blanche Lincoln, a congressional aide said.

Lincoln, an Arkansas Democrat, will propose a “no-bailout provision” as part of an overhaul of derivatives regulation she plans to unveil today, according to the aide, who declined to be identified because the plan isn’t public. The measure aims to ensure banks don’t endanger depositors’ money with risky trading of over-the-counter derivatives, the aide said.

The proposal is already drawing opposition from banks that dominate the $605 trillion over-the-counter market. Derivatives regulation being weighed by Congress could cost JPMorgan from “$700 million to a couple billion dollars,” Jamie Dimon, the bank’s chief executive officer, said yesterday during a conference call with analysts.

“I imagine their lobbyists have already contacted their best contacts in the government,” said Darrell Duffie, a finance professor at Stanford University in Palo Alto, California.

The five biggest dealers in the largely unregulated market — all commercial banks — earned $28 billion from derivatives trading last year, according to reports collected by the Federal Reserve and people familiar with the matter.

Tougher Than Obama

Lincoln’s provision would bar swaps dealers from taking advantage of the Federal Reserve’s discount lending window, emergency liquidity functions and the Federal Deposit Insurance Corp.’s deposit guarantee.     “It eliminates all of the advantages with the affiliation with an insured depository institution, which are profound,” said Karen Petrou, managing partner of Washington-based research firm Federal Financial Analytics Inc.

President Barack Obama met with House and Senate leaders at the White House yesterday, pushing them to finish work on the regulatory legislation he proposed last June. He said the bill must include strong oversight of the derivatives market, which he described as an “enormously risky” part of the shadow economy.

Lincoln’s bill is tougher than what Obama has proposed for derivatives oversight and could complicate efforts to pass a broader regulatory overhaul bill, lawmakers said yesterday. It would have to be approved by the Agriculture Committee and then incorporated into the broader regulatory-reform bill drafted by Senate Banking Committee Chairman Christopher Dodd. Dodd’s was approved by the banking panel last month on a 13-10 vote without Republican support.

Moderate Democrat

Lincoln, a moderate Democrat who has campaigned in Arkansas on her independence from party leadership, is facing a tough primary election fight, with members of the progressive wing of the Democratic Party like MoveOn.org attacking her for being too close to Wall Street.

Senator Judd Gregg, a New Hampshire Republican, expressed frustration that a deal between Lincoln and Senator Saxby Chambliss of Georgia, the Agriculture panel’s top Republican, had fallen apart under White House pressure. Gregg indicated the derivatives bill wouldn’t get Republican support.

“Obviously all bets are off,” said Gregg, who spent months in Banking Committee negotiations that failed to yield agreement on derivatives language.

Republicans signaled that they will oppose Dodd’s bill, which they said won’t prevent taxpayers from having to prop up failed financial firms in the event of a future economic crisis.

“It’s a bill that actually guarantees future bailouts of Wall Street banks,” Senate Republican Leader Mitch McConnell old reporters after meeting with Obama.

Spin Offs

Along with forcing commercial banks to spin off their swaps dealers to a different corporate entity, Lincoln’s derivatives legislation would bar dealers, exchanges, clearinghouses and other swaps-market participants from being able to take advantage of emergency lending from the Fed, according to the aide.

It would also increase protections for clients by requiring swaps dealers to treat them as a fiduciary — obligating them to put customers’ interests ahead of the company’s, the aide said.

The measure requires most over-the-counter derivatives to be traded on exchanges or through clearinghouses. Companies that use swaps to hedge the cost of materials or other non-investment purposes would be exempted from the requirements, the aide said.     Like the Volcker rule, which would ban commercial banks from proprietary trading, the wall-off provision would separate derivatives trading from traditional banking activities such as taking deposits and making loans.

Cheaper Funding

It is also an effort to crack down on the possibility that banks would use cheaper funding provided by deposits insured by the FDIC. to subsidize their trading activities, the aide said.

The proposal, which would affect 25 to 30 banks that trade derivatives, is likely to generate strong opposition, analysts said. Along with Goldman Sachs and JPMorgan, the other three banks that control almost all swaps trading are Morgan Stanley, Citigroup Inc. and Bank of America Corp.    “With 97 percent of OTC derivatives housed in the five biggest banks, it tells you how critical it is for the business model to be affiliated with a really big bank,” said Petrou of Federal Financial Analytics.

Treasury Secretary Timothy F. Geithner, speaking at the White House yesterday, said Lincoln’s plan was promising.

“Based on what she has laid out in public, it looks like a very strong bill, very close to where we are,” Geithner said.

To contact the reporters on this story: Robert Schmidt in Washington at rschmidt5@bloomberg.net; Phil Mattingly in Washington at pmattingly@bloomberg.net.

Lehman failed to report “repo” transactions, cooked books

If this doesn’t convince you that the Timothy Geithner knew about the securities shenanigans that were going on at Lehman, than I don’t know what will.

Keep in mind, that Geithner ran Lehman through 3 “stress tests” prior to bankruptcy; all of which Lehman failed, and yet, nothing was done. Anton R. Valukas–the examiner who wrote the 2,200 page investigative-report which was released on Thursday– has provided plenty of information detailing Lehman’s “materially misleading” accounting and “actionable balance sheet manipulation.”

In other words, they cooked the books.

“Quite a few observers… have been stunned and frustrated at the refusal to investigate what was almost certain accounting fraud at Lehman. ….The unraveling isn’t merely implicating Fuld (Lehman CEO) and his recent succession of CFOs, or its accounting firm, Ernst & Young, as might be expected. It also emerges that the NY Fed, and thus Timothy Geithner, were at a minimum massively derelict in the performance of their duties, and may well be culpable in aiding and abetting Lehman in accounting fraud and Sarbox violations….

We need to demand an immediate release of the e-mails, phone records, and meeting notes from the NY Fed and key Lehman principals regarding the NY Fed’s review of Lehman’s solvency. If, as things appear now, Lehman was allowed by the Fed’s inaction to remain in business, when the Fed should have insisted on a wind-down ….. at a minimum, the NY Fed helped perpetuate a fraud on investors and counterparties.

This pattern further suggests the Fed, which by its charter is tasked to promote the safety and soundness of the banking system, instead, via its collusion with Lehman management, operated to protect particular actors to the detriment of the public at large.

And most important, it says that the NY Fed, and likely Geithner himself, undermined, perhaps even violated, laws designed to protect investors and markets. If so, he is not fit to be Treasury secretary or hold any office related to financial supervision and should resign immediately. (Naked Capitalism)

Repeat: “Accounting fraud”, “collusion”, “aiding and abetting.” These are serious charges by a usually restrained blogger.

And this is from Zero Hedge:

“Lehman has become merely the latest example of all that is broken with today’s crony capitalist system…. The evident conclusion is that the core driver of modern capitalist society is fraud at its very core, and nothing short of a massive revolutionary overhaul of the political system, which is the number one defender .. of very lucrative bribes and kickbacks originating from the same rotten Wall Street that (is) nothing but a sham filled with toxic assets” Zero Hedge

This story isn’t going away. Someone has to go to jail. It’s clear that Geithner acted as the “chief facilitator” of industrial scale securities flim-flam which led directly to the Great Crash of ’08. He needs to be held accountable for his actions.
_______

Mike Whitney

Fractional reserve, banks, and foreclosures

RevolutionNot.com

I’ve been thinking a lot recently about the banking system in the USA and how banks create money out of thin air (if they have the reserves).

Under the fractional reserve system, banks are allowed to create money through a multiple of their reserves. When they create the money, it becomes the reserves for the next bank and so on and so forth. The reason why this is corrupt is because the banks don’t create value. They only create money. They only create money through loans, meaning they own the real value until you pay them back with their fake, newly minted, money

As this crisis continues they have stopped lending…. This has an important side effect. When a bank lends, they create new money. This is the only way a bank will lend because it’s virtually risk free for them. They now see money creation as too risky.

The problem we are running into now is that the banks aren’t creating new money, ahem, they aren’t lending. This can be seen here in the recreated M3:

Recreated M3

As banks continue to go bankrupt, their creation of new money dwindles. The effects of which can be seen in the decreasing M3 over the last few months.

This is why the banks continue to get preferential treatment over average citizens. They create the money. New money is ESSENTIAL to the functioning of our economy.

The reason is quite simple actually. When the bank system loans new money, they don’t lend out the interest payment. Meaning, a new loan must be taken out by the economy in general to pay the interest of that person (or company). Thus, new money is essential to keeping the race going.

Without new money, more and more people won’t be able to pay back their loans. We are already seeing this happen with the never ending “foreclosure crisis.”

Until new money is being created by the banks then there is less and less money to be able to pay the banks their interest.

What’s really cool about this is that the government has been doing EVERYTHING they can to buoy the balance sheets of banks and they still aren’t creating new money. In fact, the banks don’t want government money because they can’t give themselves billions in bonuses.

The decreasing M3 is due to people paying off their loans. This has an amazing effect of causing less money to be in the system. In essence, if all loans were paid off, there would be no money anywhere.

So in the mean time, more foreclosures will occur both in residential and now commercial real estate. The banks will continue to be in bad shape regardless of how much they legally or illegally manipulate their books. This will cause no new money to be issued thus making the problems worse.

All those people talking about a “recovery” have no idea what’s really going on. A company’s balance sheet may look good but until the banks start issuing new money, the public will stay in a world of hurt. Foreclosures will remain high and jobless numbers will keep being massaged downwards.

So what are we to do? Well, the government has been trying to fund projects to inject money into the system. The problem here is that the government is getting the money… from the banks! Our government must pay back the interest on that… meaning…. you, me, our children, grandchildren, and, well, generations will be paying back that money.

If the government actual did the constitutional thing, and took the money creation powers back from the banks and reinstalled it with Congress, we may actually have a chance to make it. As it is, I am very pessimistic about the economy due to the fraudulent ponzi scheme run by the Federal Reserve.

Last note, the Federal Reserve has a mission to have a stable currency and try to maintain high employment. They have failed on both account horribly. They have debased the dollar by 95% over the last century, and unemployment is now 20%+ using actual numbers and not the fudged ones produced by the government. A stable currency would mean 0% inflation/deflation over 100 years. A target of 2% inflation per year is NOT stable. It’s exponential growth.