22 January 2011

The Game is Up


The change essentially allows the Fed to denote losses by the various regional reserve banks that make up the Fed system as a liability to the Treasury rather than a hit to its capital. It would then simply direct future profits from Fed operations toward that liability.
Got it?
Independent monetary authority my ass.
Function follows form.  Anyone who believes that The Fed is independent after this charade, which incidentally it did on its own (and that, by itself, is cute - The Fed's "balance sheets" would never have passed examination under GAAP) has rocks in their head.

The Fed was intended to be an independent organization.  It was neither fully government, though it did have some of the power associated with governments.  Nor was it a fully market group.  It was supposed to combine the initiative of the market with the oversight of the government, and it was supposed to be independent of both institutions.

The reality is far different.  The Fed belongs to the banks, and lines their pockets because that’s where all their buddies are.  Now, with this latest move, it is also obvious that the taxpayers are on the hook for losses sustained by the Fed.  This means, essentially, that the Fed works to ensure profits for the bankers while the taxpayers are used to shield said bankers against loss.  Moral hazard, anyone?

America needs to wake up to the fact that there is a de facto aristocracy in the so-called land of the free.  The banksters are the lords of the manors, and the middle class are the serfs.  The soft socialism that Americans have bought into for the last seventy years has come to fruition.  We are all slaves now.

2 comments:

  1. America needs to wake up to the fact that there is a de facto aristocracy in the so-called land of the free. The banksters are the lords of the manors, and the middle class are the serfs.

    Certainly many Americans have been sounding the alarm for years. I personally have been hearing shrieks of outrage since the 1990s.

    By the way, "kleptocracy" or "kakistocracy" are not the same as "aristocracy."

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  2. "Aristocracy" is correctly used, albeit in a more connotative sense. Kleptocracies don't really have serfs; aristocracies do.

    The "shrieks of outrage" are mostly spot-on, but they seem to be ignored because most people think "corporations" is synonymous with "free markets." While it is certainly possible for free markets to have corporations, it doesn't follow that pro-business legislation is always pro-freedom.

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