Monday, December 15, 2008

The Federal Reserve's Ponzi Scheme

http://www.instafinance.org/images/ben-bernanke-credit-issues_25.jpg
"We are this close to swindling the whole world and we can't quit now"
"We control the media and all the politicians we need. Once we collapse the economy, eliminate the Constitution, end all decent human values and disarm the populace, we will have the control we have waited so long for. We are almost there."



Madoff’s Fraud is Nothing Compared to U.S. Treasury’s

By James West
Monday, December 15, 2008

Back in 1989, Forbes Magazine published an article painting Vancouver, Canada as the “scam capital of the world”. As evidence he cited a few debacles which certainly caused investors to lose money, but the amounts are trifling compared to the trillions that have suddenly become part of the daily news lexicon.

In fact, given the hundreds of billions that Wall Street has fleeced investors for in cases of fraud that are astounding not only in dollar size, but in the duration they run for before they collapse under the weight of their bloated treasuries.

Enron, Tyco, and Worldcom are certainly the household corporate words for fraud on Wall Street. Combined, the estimated take from those three scams was a total of $121 billion in total damages.

But hedge funds are collapsing so fast that they number in the dozens every week, and fully one third of the $1.5 trillion asset class is expected to go up in smoke within the next 24 months, dwarfing the carnage of corporate fraud.

Now along comes Bernie Madoff.

Madoff’s take of $50 billion demonstrates unequivocally that the entire investment industry is essentially one big confidence game, where appearances mean everything and substance is hard to come by. Listening to the petulant indignation emanating from the victims of that fraud who were “professional” investors elicits little sympathy from a public who watches helplessly as the Fed continues to pump taxpayer-backed dollars into the accounts of the biggest financial institutions. That wouldn’t be so bad if we saw some of that cash making its way down into the broad economy, but so far there is absolutely zero evidence of that happening.

Madoff’s fraud, improbable as it may seem, brings to mind another massive financial institution that, if the same standards of evaluation were to be applied as to Madoff, would most likely reveal another Ponzi scheme in progress.

A “Ponzi Scheme” is one where early investors are paid non-existent “profits” with the money brought in by new investors. Ponzi schemes always collapse when no more investors can be enticed into the scheme, and payouts stop. This is exactly what happened in the Madoff case, and unless I am very much mistaken, this is what is happening at the United States Treasury right now, with its accomplice, the United States Federal Reserve.

Technically, the Fed prints money when the Treasury issues it a check that it back with the sale of T-Bills. The treasury bills theoretically attract buyers because the revenue generated from taxes as a percentage of GDP are sufficient to justify the number of T-Bills in circulation. If the U.S. Economy was a corporation, T-Bills would be shares in the company, and all of the infrastructure and profit-generating businesses in the United States would be its assets, and the taxes generated across the whole operation would theoretically comprise the corporation’s revenue.

In Bernie Madoff’s case, the fan was hit with the proverbial excrement when he ran out of new investors, and some old investors wanted to withdraw $7 billion of their money. Bernie ran around Wall Street for a couple of weeks before he realized the jig was up, and he and his two sons concocted a strategy whereby they would turn him in, hopefully thwarting the boys being swept up in the inevitable incarcerations just on the horizon.

Now if Bernie was the United States Treasury, and his sons were the U.S. Federal Reserve, he could have simply called his boys and said, “Look boys…send over $7 billion right away, will ya?” The boys, being family, would have certainly wired the funds over to Bernie, and Bernie could go on his merry way, attracting a growing crowd of innocent (hah!) investors, and paying them off with his sons’ printing press. In this case, investors would continue to pile in, and Bernie could keep writing checks to his sons and issuing shares to his victims, because at no point was anybody going to say “Whoa boys! Lets take a look at them books!”

And that’s because if Bernie was the U.S. Treasury, and his sons the Fed, everybody who might want to take a peak at the balance sheets already pretty much knows what they’d find there: the ashes of the U.S. economy. Baffed out and beaten, repackaged and resold in a trillion different ways, such that there is no way the entire productivity and asset base of the United States now and for decades to come, could ever justify the trillions upon trillions of dollars worth of shares the massive Ponzi scheme that is the United States has put into circulation.

Nobody wants the illusion to end. Especially not its biggest shareholders – Japan, China and the U.K. For if their own treasuries are based substantially on the fragrant paper originated by the United States government, well then what does that say about the value of the bonds they issue to justify the quantity of their own currency in circulation?

When considered in this light, its no wonder the world’s central banks act on a concerted basis to suppress the price of precious metals. For it the metals were allowed to trade freely against these currencies of falsely inflated value, then the market would quite likely demonstrate what it thinks about those currencies by trading them in for gold – a process now underway on the fringe where wise men looking through the fog of deception that is the media, are moving as nonchalantly as possible for the exits of U.S. investment.

I wonder if we’ll ever see this sign, now gracing the web page of Bernard L. Madoff Investment Securities LLC, on the front door of the U.S. Treasury:

“The Honorable Louis L. Stanton, Federal Judge in the United States District Court for the Southern District of New York, has appointed Lee S. Richards of the law firm Richards Kibbe & Orbe LLP receiver over the assets and accounts of Bernard L. Madoff Investment Securities LLC (“BMIS”) as per the attached order: http://www.madoff.com/letters/Signedorder.pdf.

Source: http://www.midasletter.com/commentary/081215_Madoffs-fraud-nothing-compared-to-us-treasury.php


******************************************************

http://www.newyorksocialdiary.com/i/partypictures/12_15_08/P1450688.jpg

$50 Billion Madoff Swindle is Miniscule Compared to Federal Reserve's Ponzi Scheme

by Mike Adams - Natural News

The world press is ablaze today with news of the arrest of elite Wall Street broker Bernard Madoff. They say he ran an elaborate Ponzi scheme that bilked high-profile investors for more than $50 billion. Even Geneva banks lost more than $4 billion, Reuters is reporting.

A Ponzi scheme works like this: The con artist uses money from new investors to pay the apparent gains to previous investors, creating the appearance of dividends. With a solid track record of apparent gains, he attracts a growing base of new investors who funnel even more money into his hands. Behind the scenes, though, he's burning cash on an opulent lifestyle, using other people's money to make himself rich, even while cooking the books to make everybody think their money still exists.

In the end, of course, the whole thing collapses. There never was any steady growth. All the money is gone, and investors are left scratching their heads: Where'd my money go?

That Madoff, the former NASDAQ stock chairman, managed to do this with $50 billion without regulators noticing is perhaps the Wall Street story of the century. Somehow he was scamming some of the biggest players in the world while evading all accountability. Everybody was fooled.

But I say there's a story that's even bigger... one that's still evading accountability and will explode into the financial story of the millennium when it finally blows up in our faces. What story is that? The much larger Ponzi scheme being run by the Federal Reserve and the U.S. Treasury.

Consider this: The Fed has created over $7.7 trillion in new money in order to bail out all sorts of incompetent (but wealthy) individuals and companies. In effect, it's using new money to cover the losses of existing stakeholders, and as the system is nearing collapse, the only way it can keep the whole scam running is to create even more new money and thrust it in to the same money hole.

Does that sound like a mammoth Ponzi scheme, or what?

You see, Madoff could have survived his ordeal if he only had his own currency printing press. Just whip up another $50 billion in counterfeit currency and your problems are solved! But Madoff didn't have a printing press. The Federal Reserve does. And it's using it to expand the biggest Ponzi scheme the world has ever seen.

It's doing it all in complete secrecy, of course, refusing to reveal where all this money is going (http://www.bloomberg.com/apps/news?pid=...)

Meanwhile, it's throwing money in all the wrong places, rewarding the economy's most incompetent money managers while refusing to let bad companies fail like they're supposed to. The perception of favoritism is growing to the point where one Senator now warns that bailing out the auto giants could lead to riots in the streets (http://www.businessandmedia.org/article...).

Meanwhile, home prices continue to plummet and foreclosures are still on the rise across America. We're looking at a new generation of American homeless as everyday families lose their incomes and their homes, ending up living on the streets where they can't even afford their Starbucks lattes anymore!

Home prices are so depressed that they may not recover in our lifetime after accounting for inflation, warns one investment analyst (http://www.usatoday.com/printedition/ne...). If that's true, it means all those people who bought homes at the peak in 2006 or 2007 are going to be holding and waiting until the day they die just to break even.

To keep the national Ponzi scheme going, the Fed is pumping money into the economy more frantically than a one-legged man in an ass-kicking contest. New (counterfeit) money keeps bailing out old money, and the stakes grow larger and more dangerous with each passing week. For every incompetent company that isn't allowed to just fail like it's supposed to, there will be an equal or larger wipeout in taxpayer savings when this Ponzi scheme can no longer be sustained.

Money isn't free. Somebody somewhere pays the piper. And in this case, that's going to be the U.S. taxpayer, whose future has already been mortgaged beyond all reason. In a contracting economy, with nearly a million new jobless every month and with the national savings rate below zero, how are U.S. taxpayers supposed to foot the bill for $7.7 trillion in rich bankster bailouts?

They're not. Like any Ponzi scheme, there is no way out other than collapse. The U.S. government has no method by which it can pay back its debt, and that makes the piling on of more debt an accounting scam. It's like the family living next door realizing they have to declare bankruptcy, so they go on a spending spree and max out all the credit cards right before filing.

Henry Paulson is the next Bernard Madoff.

And when this Federal Reserve Ponzi scheme breaks, it won't just be a few wealthy investors who are hit by the news... it will be every last one of us who pays taxes in America.

I've done the math on this. There are 147 million people employed in the U.S. The national debt will now require each and every U.S. worker to come up with about $68,000 in order to pay off the debt. Most workers don't even earn that much salary in a year, after taxes. Many are working low-wage jobs that barely keep them scraping by as it is. How is every taxpayer supposed to come up with $68,000 to pay off international creditors?

And on top of that, the Fed's creation of yet another $7.7 trillion in new money is going to cause accelerating currency inflation starting in 2009 (and growing for many years thereafter). So the money people earn will be worth less and less. Taxes will have to be raised to ridiculous rates, leaving people with smaller and smaller take-home checks.

This Ponzi scheme, you see, is being played out with the taxpayers' money but without their consent! You've all been signed up for the greatest Ponzi scheme in the history of the world, and when this one goes bust, you'll be lucky to wind up holding ten cents on the dollar.

more: http://www.naturalnews.com/News_000613_Ponzi_scheme_Wall_Street_Bernard_Madoff.html

***********************************************************
http://blog.puppetgov.com/wp-content/2008/08/federal-reserve-400.jpg

The Federal Reserve Bank - it's not what you think -
who owns the bank?


In Part One of this series I said I would tell who owns the Federal Reserve Bank and that you would be surprised. As I said, the Federal Reserve is a private company of bankers with twelve branch banks that confiscate our money and they have been doing this for almost a hundred years. They are not part of the United States government but they collect hundreds of billions of dollars from the American taxpayers every year, trillions in total, and they have never been audited and they do not pay taxes on profits.

Representative Louis T. McFadden, Chairman of the Committee on Banking and Currency for 12 years is quoted in the Congressional Record as saying:

“The Federal Reserve Board, ..., has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt...Our people's money to the extent of $1,200,000,000 has within the last few months been shipped abroad to redeem Federal Reserve Notes and to pay other gambling debts of the traitorous Federal Reserve Board and the Federal Reserve Banks … “

So who are the masters of the Federal Reserve Bank who receive these huge profits; they include an impressive list of Foreign owned banks and investment houses, and domestic banks.

If you don’t believe The Federal Reserve (FED) is a PRIVATELY OWNED, organization; check the ENCYCLOPAEDIA BRITANNICA.

The owners of the 12 Central Federal Reserve Banks are:

- Rothschild Bank of London
- Rothschild Bank of Berlin
- Lazard Brothers of Paris
- Israel Moses Seif Banks of Italy
- Warburg Bank of Amsterdam
- Warburg Bank of Hamburg
- Lehman Brothers of New York
- Kuhn Loeb Bank of New York
- Goldman, Sachs of New York
- Chase Manhattan Bank of New York

All-in-all there is about 300 VERY POWERFUL foreign individuals that own the FED through ownership of the listed banks and investment houses.

Theoretically the FED is required to give back most of its PROFITS to the Treasury Dept., but there is NO ORGANIZATION that has the power to AUDIT the FED (not even the Congress or the IRS). Therefore there is a huge opportunity for "creative accounting" to hide and deny the profit that the U.S. Tax Payers are entitled to, which amounts to Hundreds of Billions of Dollars annually.

A few Republicans congressmen annually introduce legislation to AUDIT the FED, and every year, the legislation is defeated. The owners of the FED are an extremely powerful, invisible lobbying power.

Of course it helps the FED owners that they exert major control of media outlets so that the public is kept uninformed about the FED owners’ shenanigans. The owners of the FED own the controlling interests in ALL major media in the United States; Rockefeller, through Chase Manhattan bank, controls CBS and ABC and 28 other broadcasting firms. Each of the other owners of the FED also has controlling interest in the US media. This explains why the media have been silent about the FED scam. The FED fraud is the biggest and longest cover-up in United States history.

As pointed out in Part One, According to Article 1, Section 8 of the Constitution, the US Congress has the power to print money (The Congress shall have the power...to coin money, regulate the value thereof, and of foreign coin, ..). According to the Supreme Court, the Congress cannot transfer its power to other organizations like the FED, but they have done it anyway.

Here is how the owners of the FED profit at the expense of the American people.

The US Government runs deficits annually in the billions of dollars, and lately in the trillions of dollars. Congress covers this by issuing government bonds which are bought by the FED. Since the FED has the power to print money, it can buy any amount of the US. Government bonds at almost NO COST, except for the small fee paid to the Treasury to print money (about 3 cents/$100).

This amounts to a profit to the FED owners of about $99.97 for every 3c they invested to print the money. Basically, they exchange something that costs almost nothing to them for the US Government Bonds.

Since the FED can NOT be AUDITED by the IRS (or even by Congress), most of this profit can go anywhere the FED owners want it to go; and it is tax free.

After buying the bonds, the owner of the FED can either keep the bonds, and collect the interest the US Government now owes them, or sell the bonds to the U.S. Taxpayers or foreigners. In either case, the FED owners have received $99.97 profit for every 3 cents it invested to print the money. Since the FED is a privately owned corporation, the profit of the FED goes to the FED owners.

The U.S. Government now owes the FED owners the interest on those bonds. Remember the FED owners do not earn the bonds, they simply arrange for printing the money to buy the bonds. In other words, they created money out of thin air, and exchange it for the interest bearing bonds.

In order to pay for the bonds' interest, the U.S. Government taxes the US population.

When a U.S. citizen holding U.S. Government bonds receives his/her return of investment on the bonds, essentially the money he/she receives is the tax money he/she is paying to the Government.

When the OWNERS of the FED receive the interest on the BONDS they're holding, they are receiving that money essentially for free and without the need to pay taxes on the profit.

In reality every year the FED profits by hundreds of billions of dollars by buying US Government Bonds. Yet it only returns about $20 billion to the US Treasury. The rest of the profit has been spent as "Operational Expenses". The FED expects us to believe that the FED operational expenses are hundreds of billions of dollars annually.

In actuality those profits are given as "DIVIDENDS TO SHAREHOLDERS.”

Is there any doubt this scam will eventually increase the national debt and lead to bankrupt the government?

THE FED SHOULD BE ABOLISHED

The U.S. Congress has the option to buy back the FED at $450 million (per Congressional Records). If the Congress does this, it will own back the billions of U.S. Government Bonds held by the FED. The U.S. Government will actually profit by buying back the FED; and the U.S. government would no longer have to pay interests to the FED owners on those bonds.

This will give the owners of the FED what they deserve after all the years of milking the public. Through their ownerships in the FED, powerful foreign and domestic banks have raked in trillions of dollars in tax free dividends; isn’t it about time we do something about it?

Let’s remember what Henry Ford once said “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

3 comments:

  1. With Madoff, it gets better.

    He had dealings with and stole from his accounts with the Royal Bank of Scotland.

    RBS is getting 50 BILLION pounds from the English government to help them thru this "crisis."

    Sweet.

    Steal money from your own accounts, ship some to Israel, and stash some and let the taxpayers re-imburse the amount stolen.

    Christ, compared to these thieves, Jesse James and Al Capone were chump change.

    Abolish the Fed? Fucking aye and right now.

    They changed the Consitution and that requires an amendment, not some law passed days before Christmas.

    In other words, it was illegal from the gitgo.

    Instead of owing trillions in interest payments to foreigners, we'd owe the money to ourselves.

    The debt has gotten so bad, we're no longer paying only money on the interest, we're paying interest on the interest.

    ReplyDelete
  2. I would love to have a business where I could write out loans without ever really tranferring any real cash to anyone YET still COLLECT the interest on the debt.

    WHAT A SWEET FUCKIN' DEAL!!!! When do I start?

    Who knew gettin' rich would be so easy! This beats every other get rich scheme hands down and I don't even have to send in a MONEY ORDER for five bucks to get the 'Undisclosed Secrets of Instant Wealth!.

    Best part is--I don't have to buy a run down house and 'fix it up' to unload on some other poor sucker.

    With this scheme, we are not all "Keynesians" as Nixon said.

    Hell NO!

    WE ARE ALL SUCKERS NOW!!!

    ReplyDelete
  3. Len,
    You should write a specific piece on the Fed. It's been done in many other places but some of your readers may appreciate it. This is not a republican/democrat thing, it transcends party lines.

    ReplyDelete